2016 (12) TMI 883 - HC - VAT and Sales Tax

Whether the impugned order of assessment dated 27.04.2016 could be said as in breach of principles of natural justice or not? - Held that - It is hardly required to be stated that it is true that by way of self-imposed restriction when the alternative remedies are available, this Court in exercise of the power in Article 226 of the Constitution may decline to entertain the petition but such bar of self- imposed restriction may not apply if there is ex facie breach of principles of natural justice. In the present case as observed by us hereinabove, the impugned order at Annexure D can be said to be in breach of principles of natural justice and hence it would be in appropriate case to interfere with the order and to set aside the same, since it is in breach of the principles of natural justice in as much as that the so-called re vised notice dated 11.03.2016 which has been taken into consideration by the assessing authority has not been served nor the appellant has been given any opportunity to meet with the same. The order passed by the learned Single Judge as well as the impugned order for assessment dated 27.04.2016 Annexure D are set aside with the further observation that the matter shall stand restored to the file of the office of the Deputy Commissioner, for re-assessment - appeal allowed by way of remand.

Summary

Issues:
1. Whether the impugned order of assessment breached principles of natural justice.

Analysis:
The appellant, a manufacturer and trader of granite slabs, filed a return under the Karnataka Value Added Tax Act, 2003. The assessing authority issued a notice for re-assessment for the period of 2009-2010, to which the appellant filed objections. Subsequently, the authority passed an order of assessment on 27.04.2016. The appellant challenged this order before the Single Judge, who declined to entertain the petition citing an alternative efficacious remedy. The main issue in the appeal was whether the impugned order breached principles of natural justice. The appellant contended that a revised notice dated 11.03.2016 proposing additional tax liability was not served to them, depriving them of the opportunity to respond. The respondent, after verification, was unable to confirm if such a revised notice was issued or served.

The High Court noted that the assessing authority considered the so-called revised notice in passing the order of assessment, despite the appellant not being given an opportunity to address it. The Court emphasized that when there is an ex facie breach of natural justice, self-imposed restrictions on entertaining petitions may not apply. In this case, the failure to serve the revised notice and provide an opportunity for the appellant to respond amounted to a breach of natural justice. Consequently, the Court set aside the orders of the Single Judge and the assessment, directing the matter to be restored for re-assessment by the Deputy Commissioner. The Court instructed that if the revised notice dated 11.03.2016 was to be considered, it must be served to the appellant for objections before a final order is passed.

In conclusion, the appeal was allowed, and the matter was remanded for re-assessment with proper adherence to principles of natural justice. The Court made no order as to costs, and the rule was made absolute. Additionally, a related application was deemed unnecessary for consideration in light of the main appeal judgment.