2017 (1) TMI 640 - HC - VAT and Sales Tax

Taxability - the goods, namely, roof cladding and steel sheets - whether goods classified under residual entry or not? - the issue involved in these writ petitions is squarely covered by the decision of this Court in W.P.Nos.10356 and 10357 of 2015, dated 20.04.2015, which was filed by the petitioner for an identical relief - Held that - in respect of the earlier assessments, i.e. for the year 2007-08 and 2008-09, though the impugned orders were set aside and the matter was remanded, in the above referred writ petitions, the matter is still pending consideration before the first respondent. Therefore, the first respondent shall consider all the matters together and pass a speaking order - petition allowed - matter on remand.

Summary

Issues:
1. Interpretation of tax liability on goods
2. Quasi-judicial authority's discretion in assessment
3. Violation of principles of natural justice in assessment process

Interpretation of Tax Liability on Goods:
The court noted that the issue of tax liability on roof cladding and steel sheets was previously addressed in a similar case. The petitioner contested the classification of these goods under a residual entry, arguing against the proposed tax rate. Despite objections and submissions of relevant documents, the assessing officer proceeded with the assessment without considering the Advance Ruling that favored the petitioner's position. The court emphasized that the goods in question were assessed at a lower tax rate in the state and directed a re-consideration of the assessment, highlighting the importance of following statutory provisions and providing a fair opportunity for the petitioner to present their case.

Quasi-Judicial Authority's Discretion in Assessment:
The judgment highlighted the role of the Assessing Officer as a quasi-judicial authority responsible for assessments. It was clarified that the Assessing Officer is not bound by higher authorities' directions but must adhere to statutory provisions and principles of natural justice. The court found fault with the first respondent for not granting a hearing before increasing the turnover amount significantly without notice to the petitioner. Consequently, the court set aside the impugned orders and instructed a fresh consideration of the matter with a proper opportunity for the petitioner to present their case, emphasizing the importance of procedural fairness in assessment proceedings.

Violation of Principles of Natural Justice in Assessment Process:
The judgment addressed the violation of principles of natural justice in the assessment process. The court pointed out that the first respondent failed to provide a hearing opportunity before enhancing the turnover amount, leading to a procedural irregularity. By not following the principles of natural justice, the impugned orders were deemed invalid, and the matter was remanded for a re-consideration with due regard to affording a personal hearing to the petitioner. The court stressed the significance of adhering to procedural fairness and providing a fair chance for the petitioner to present their objections and evidence before finalizing the assessment.