2020 (10) TMI 954 - HC - VAT and Sales Tax

Principles of Natural Justice - Concessional rate of tax - sale of the used motor vehicles - case of petitioner is that no opportunity of hearing was granted, except permission to file reply, even the rate of tax as per Section 6(1) of the KVAT has not been charged properly - HELD THAT - Discretion by warranting interference under Article 226 of the Constitution of India can be always exercised in case, on perusal of the impugned order, prima facie, it is established to be without jurisdiction or non- adherence to the principles of natural justice. But the argument of counsel representing the petitioner is apparently not tenable on plain perusal of the impugned order as not only the reply was ordered to be given on 28.02.2020 even the Assistant Manager of the petitioner also appeared and he argued the matter as noticed in the impugned order. There is no such assertion in the writ petition with regard to that. The aforementioned order is appealable under Section 55 of the erstwhile KVAT Act, 2003. Petition dismissed.

Summary

Issues: Challenge to assessment order for assessment year 2013-14 by State Goods & Services Tax Department.

Analysis:
1. The petitioner challenged the assessment order dated 02.03.2020 for the assessment year 2013-14 by the State Goods & Services Tax Department. The challenge was based on the grounds that no opportunity of hearing was granted, and the correct rate of tax as per Section 6(1) of the KVAT was not applied. Specifically, the concessional rate of 0.5% for the sale of used motor vehicles was not considered, and instead, a tax rate of 14.5% was imposed.

2. The petitioner's counsel argued that although a reply was filed on 28.02.2020, the assessment order was issued on the following working day without granting a proper opportunity for a hearing. It was contended that the order was arbitrary and predetermined. The counsel emphasized that when an order is issued without jurisdiction, the aggrieved party should not be limited to the remedy of appeal, but should be able to seek judicial interference under Article 226 of the Constitution of India.

3. In response, the opposing counsel stated that not only was a reply filed, but a personal hearing was also provided, as reflected in the impugned order. It was suggested that the petitioner's argument was an attempt to circumvent the limitation period for raising objections, given that the assessment year in question was 2013-14.

4. After hearing both parties and reviewing the relevant documents, the court found no merit in the petitioner's arguments. The court emphasized that judicial interference under Article 226 could be justified if the impugned order was found to be without jurisdiction or in violation of natural justice principles. However, in this case, the court noted that the petitioner's claim was not supported by the facts, as both a reply and a personal appearance by the petitioner's Assistant Manager were recorded in the impugned order.

5. Ultimately, the court concluded that there were no grounds for interference and that the petitioner could pursue the remedy of appeal as provided under Section 55 of the KVAT Act, 2003. The court dismissed the writ petition, allowing the petitioner to avail of the appeal process if desired.