2018 (9) TMI 1423 - HC - VAT and Sales Tax

Principles of natural justice - case of respondent is that even though sufficient opportunities were given to the petitioner, he did not utilise the same and therefore, with the available records, an order has been passed - Held that - The mere fact that the assessee was given an opportunity for perusing the D7 records by the Enforcement Wing Officer would not be sufficient compliance of the principles of natural justice by the assessing officer, as the assesse requested the Assessing Officer to furnish the copies of the D7 records at his cost, so that he could reply to the re-assessment notice after the D7 records came into the hands of the Assessing Officer for the purpose of making assessment. In the present case in hand, though the petitioner specifically gave a reply and prayed for the copies of D-7 records, based on which reassessment has been made at the time of admission, this Court has granted an interim order - since the principles of natural justice is violated, the order passed by the Authority is liable to be set aside. The matter is remanded back to the Authority to give copies of D-7 records - Petition allowed by way of remand.

Summary

Issues:
1. Assessment based on seized records without proper opportunity for explanation.
2. Violation of principles of natural justice in reassessment proceedings.
3. Request for copies of seized records and personal hearing not considered.

Analysis:
1. The petitioner, a manufacturer and dealer, challenged an assessment order for the year 2004-05, where an excess stock was alleged based on an inspection without physical stock verification. The petitioner's explanations were not considered, leading to the writ petition.
2. Despite the petitioner's submissions and explanations during the enquiry, the respondent passed the impugned order without due consideration. The petitioner's compliance with tax reporting and payments for the year in question was acknowledged, but the assessment was reopened based on seized records.
3. The respondent argued that the petitioner failed to provide explanations despite opportunities given. However, the petitioner's request for copies of seized records and a personal hearing was not adequately addressed, leading to a violation of natural justice principles.
4. The court noted that the reassessment was solely based on seized records without proper consideration of the petitioner's submissions and requests. Citing a relevant judgment, the court emphasized the importance of providing copies of seized records for a fair assessment process.
5. Ultimately, the court found a violation of natural justice principles and set aside the impugned order. The matter was remanded back to the Authority to provide copies of seized records, allow a personal hearing, and pass fresh orders within a specified timeframe. Cooperation from the petitioner was mandated for the enquiry proceedings.