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2019 (4) TMI 1638 - HC - VAT and Sales TaxValidity of assessment order - export sales - case of the petitioners is that the petitioner is not under obligation or has incurred any tax liability now determined by the respondent because the sales which are reflected in Ext.P6 are export sales effected by the petitioner - HELD THAT - This Court is of the view that, keeping particularly the reply of the petitioner in perspective, viz, the transactions are exempt from taxability under the Act, to ensure fairness in action or to at least put the petitioner on notice or give personal hearing in this behalf, and then, taxability is decided. Thereafter if the petitioner fails to avail the opportunity or convince the first respondent, then no exception to the best judgment first respondent makes, at the first instance, be taken under Article 226 of the Constitution of India. Matter is remitted to first respondent.
Issues:
Challenge to assessment order under Section 25 of the KVAT Act, 2003 regarding tax liability on export sales. Allegation of lack of opportunity to present further documents before assessment. Analysis: 1. The petitioner contested an assessment order (Ext.P6) under the KVAT Act, claiming the sales were export transactions not subject to tax liability. The respondent issued a notice and received a reply with supporting documents but proceeded with the assessment without granting an opportunity for additional evidence submission. 2. The respondent's order cited the absence of specific export-related documents as grounds for rejecting the exemption claim, leading to a tax liability determination. The petitioner argued for a fair chance to present further evidence to support the exemption claim, emphasizing the transactions' non-taxable nature. 3. The Government Pleader defended the respondent's actions, stating that the statutory appeal process allows for additional document submission. The court noted the lack of detailed reasoning in the assessment order and the importance of considering the petitioner's response to ensure fairness before determining tax liability. 4. The court found the respondent's reasoning insufficient and set aside the assessment order (Ext.P6), directing the petitioner to submit additional documents and arguments for assessment reconsideration. The court emphasized the need for a fair hearing and detailed consideration of the petitioner's contentions before finalizing the tax liability assessment. 5. The court remitted the matter to the respondent for reassessment, instructing a new hearing for the petitioner to present additional evidence by a specified date. The judgment aimed to ensure procedural fairness and thorough consideration of the petitioner's case before determining tax liability under the KVAT Act.
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