2021 (4) TMI 830 - HC - VAT and Sales Tax

Principles of natural justice - impugned assessment order passed without considering the response of the petitioner and without affording a personal hearing - HELD THAT - In the last one year, it is noticed at least 200 cases where the Assessing Officer under the CST Act has not issued show cause notice or if they issued notice, they have not considered the response of the assessees, and mechanically confirmed the demand mentioned in the show-cause notice and we have had to set aside all such orders and make a remand to the Assessing Officers - In spite of specific warning by this Court to the Standing Counsel for the Commercial Taxes Department that this kind of conduct by the Assessing Officers will not be countenanced, it appears that she same thing is continuing obviously because this Court has taken a lenient view in the earlier matters and had avoided imposing costs. This Court is being burdened time-and-again to decide the correctness of such assessment orders being passed by the Assessing Officers in violation of principles of natural justice. The matter is remitted back to the 2nd respondent for fresh consideration and 2nd respondent is directed to provide personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Assessment order under Central Sales Tax Act, 1956 challenged for lack of considering response and personal hearing.

Analysis:
The petitioner challenged an Assessment Order passed by the 2nd respondent under the Central Sales Tax Act, 1956 for the period April 2016 to March 2017. The petitioner contended that despite responding to a show-cause notice and requesting a personal hearing, the impugned assessment order was issued without considering the petitioner's response or providing a personal hearing. The Assistant Government Pleader for respondents failed to demonstrate that the petitioner's response was taken into account in the assessment order or that a personal hearing was granted.

The High Court noted a recurring issue where Assessing Officers under the CST Act failed to issue show cause notices or consider responses from assessees, leading to mechanically confirmed demands. The Court highlighted that it had to set aside numerous such orders in the past year and remand them for reconsideration. Despite warnings to the Commercial Taxes Department, the conduct persisted, burdening the Court with repeated assessments in violation of natural justice principles.

In light of the above, the High Court allowed the Writ Petition, setting aside the impugned assessment order and remitting the matter back to the 2nd respondent for fresh consideration. The 2nd respondent was directed to provide a personal hearing to the petitioner, consider the response along with supporting material, and pass a reasoned order in accordance with the law. Additionally, the 2nd respondent was ordered to pay costs of &8377;10,000 personally to the petitioner within four weeks. The Court instructed the communication of the order to the Commissioner of Commercial Taxes, State of Telangana, and the 1st respondent in the Writ Petition, with pending miscellaneous petitions to stand closed.