2016 (11) TMI 1193 - HC - VAT and Sales Tax

Liability of VAT - entry tax - principles of natural justice - Held that - the fact remains that the liability of more than ₹ 14 Crores has been imposed upon the petitioner and the orders have been passed ex parte and, therefore, interest of justice requires that at lease one opportunity should be granted to the petitioners to submit their account books and other documents to give their say in the matter and then only the assessment should be finalized - petition disposed off by way of remand.

Summary

Issues:
Challenging ex parte order of assessment for VAT and entry tax liability without proper opportunity under M.P. V.A.T. Act.

Analysis:
The petitioner challenged an ex parte order of assessment imposing a significant liability for VAT and entry tax without adequate opportunity. The petitioner filed a writ petition under Article 226 and 227 of the Constitution of India, questioning the order dated 30.1.2016 by the Assistant Commissioner, Commercial Tax, Jabalpur, and the subsequent rejection of an application under Section 34 of the M.P. V.A.T. Act on 8.3.2016. The primary contention was the lack of proper opportunity before the ex parte assessment, with the petitioner's representative being hospitalized on the scheduled date. The petitioner argued that the liability of over ?14 Crores was unjustly imposed without due process, hindering their ability to deposit 5% for an appeal under Section 46, leading to the filing of the writ petition seeking to set aside the ex parte assessment order and remand the matter for reconsideration.

Maintainability of Writ Petition:
The respondent contended the writ petition's maintainability, highlighting the failure to deposit the undisputed amount when filing the application under Section 34 to set aside the ex parte order. The respondent emphasized the availability of the appeal remedy under Section 46 against an ex parte assessment order, suggesting that the writ court should not intervene. It was argued that the petitioner and their representative had multiple opportunities to submit relevant documents before the Assessing Officer but failed to do so, leading to the ex parte proceedings. The respondent stressed that the petitioner's failure to comply with procedural requirements warranted the ex parte assessment.

Court's Decision and Directions:
Upon hearing both parties, the Court found merit in the petitioner's argument regarding the lack of opportunity due to the representative's hospitalization. The Court noted the substantial liability imposed ex parte and deemed it necessary to grant the petitioner a chance to present their account books and documents before finalizing the assessment. Consequently, the Court allowed the petition, quashed the impugned order of assessment, and directed the petitioner to appear before the Assessing Officer with relevant documents and a deposit of ?10,00,000 on a specified date. Failure to comply with the directions would empower the Assessing Officer to proceed without further opportunities. The Court emphasized the importance of timely compliance to avoid further defaults.