2018 (11) TMI 60 - HC - VAT and Sales Tax

Assessment of escaped turnover - section 25(1) of KVAT Act - case of the petitioner is that on receipt of Exts.P1 and P1(a) notices, the petitioner preferred Exts.P2 and P2(a) requests on 30.12.2012 seeking one month s time. It is alleged that without giving any further intimation in the matter, the proceedings have been completed - Principles of Natural Justice. Held that - In the absence of any communication on the request made by the petitioner, the assessing authority should not have completed the assessments, without a further notice to the petitioner - In so far as the said course was not adopted by the assessing authority, I am in agreement with the case set up by the petitioner that Exts.P3 and P3(a) orders are vitiated for non compliance of the principles of natural justice. The assessing authority is directed to complete the assessments pursuant to Exts.P1 and P1(a) notices afresh, after affording the petitioner an opportunity of hearing - petition allowed by way of remand.

Summary

Issues:
Assessment under the Kerala Value Added Tax Act for escaped turnover during specific periods, failure to respond to notices within the stipulated time, completion of assessments without further communication or opportunity for objections, challenge to assessment orders on grounds of errors apparent on the face of the record, violation of principles of natural justice.

Analysis:
The petitioner, an assessee under the Kerala Value Added Tax Act, faced assessment for escaped turnover during the periods 2011-‘12 and 2013-‘14 through notices Exts.P1 and P1(a). Upon receiving the notices, the petitioner requested one month's time through Exts.P2 and P2(a) to respond. However, the assessing authority completed the assessments on 2.2.2018 without further communication or allowing objections. The orders issued in this regard, Exts.P3 and P3(a), were challenged in a writ petition on the basis of errors apparent on the face of the record.

During the hearing, the learned Government Pleader argued that since the petitioner did not raise objections within one month from the date of the request for an extension, the assessments were completed as proposed in the notices. However, it was acknowledged that no communication was provided to the petitioner regarding the adjournment request made by them. The Court noted that in the absence of communication on the extension request, the assessing authority should not have finalized the assessments without issuing a further notice to the petitioner. Consequently, the Court found merit in the petitioner's claim that the orders Exts.P3 and P3(a) were flawed due to non-compliance with the principles of natural justice.

As a result, the writ petition was allowed, and orders Exts.P3 and P3(a) were set aside. The assessing authority was directed to conduct the assessments afresh based on the notices Exts.P1 and P1(a), providing the petitioner with an opportunity for a hearing. The petitioner was instructed to appear for the hearing on 2.4.2018 and submit any objections against the proposal before that date.