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TMI Blog2024 (8) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision of Section 2 (30) (c) of the Act though learned Assistant Government Pleader has tried to explain the same during the course of hearing as well as relying upon the averments made in the affidavit-in-reply. The show-cause notice for penalty also appears to be a cyclostyled show-cause notice. Therefore, without entering into the merits of the matter, the impugned order dated 14th November, 2019 and the notice for penalty dated 14th November, 2019 are hereby quashed and set aside and the matter is remanded back to respondent No. 2, with a direction to give opportunity of hearing to the petitioner and pass fresh de novo order in accordance with law after complying with the directions issued by this Court in MALANI CONSTRUCTION COMPANY VERSUS STATE OF GUJARAT by applying mind to the method of accounting and also to take into consideration the decision of the Apex Court in the case of GANNON DUNKERLEY CO. VERSUS STATE OF RAJASTHAN LARSEN TOUBRO LTD. UNION OF INDIA [ 1992 (11) TMI 254 - SUPREME COURT] by giving detail reasons for coming to the conclusion if the respondent No. 2 is of the view that the method adopted was in accordance with Section 2 (30) (c) of the VAT Act. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequent period. 5.3 The petitioner had, during the earlier assessment years, also filed annual self-assessment returns following cost plus gross profit method for arriving at taxable turnover of sales. The assessments of the previous periods were completed by the respondent authority either under audit assessment category or under deemed assessment category. 5.4 The scrutiny/audit assessment of the petitioner for period under consideration came up before the respondent No. 2. The respondent authority was of the view that the method adopted by the petitioner for arriving at taxable turnover of sales is not in consonance with the provisions of Section 2 (30) (c) of the Act and therefore, issued a communication dated 06th March, 2019 intimating the petitioner that he has decided to frame assessment by adopting method as provided in Section 2 (30) (c) of the Act for arriving at taxable turnover of sales and had also decided that the method adopted by the petitioner for arriving at taxable turnover of sales is liable to be rejected. 5.5 The respondent No. 2, along with such intimation, also issued a notice in Form No.309 dated 06th March, 2019 proposing to impose penalty under Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egality and validity of the assessment order dated 24th March, 2019. 5.11 Coordinate Bench of this Court has allowed the said petition by judgment dated 23rd August, 2019 remanding the matter back to the respondent No. 2 for fresh assessment. 5.12 Pursuant to the aforesaid directions of Coordinate Bench of this Court, the respondent No. 2 issued notice dated 17th September, 2019 for audit assessment to the petitioner in Form No.302. The respondent No. 2 also issued notice dated 06th November, 2019 in Form No.309 for imposing penalty under Section 34 (12) of the Act which, as per the case of the petitioner, was in a cyclostyle format, which indicates 17 instances where penalty under the Act can be imposed, however the respondent No. 2 failed to indicate a single instance or reason to believe as to why huge penalty of Rs. 07,20,48,000/- was required to be imposed. The notice was issued on 06th November, 2019 and the date of hearing was fixed on the very next day i.e. on 07th November, 2019. 5.13 The respondent No. 2 Assistant Commissioner of State Tax once again passed the impugned order dated 14th November, 2019 without affording proper opportunity of hearing and without following t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idencing that sufficient opportunity of being heard has been granted and no principles of natural justice is violated is a below. a. A notice u/s 34 (2) dated 17.09.2019 was issued to the petitioner in Form 302 requesting the petitioner remain present on 05.10.2019 with relevant documents for the purpose of assessment for the time period 01.04.2014 to 31.03.2015. b. In response to the said notice the authorized representative of the petitioner's Mr. Ketanbhai Bhalodiya and their Lax consultant Mr. Chandreshbhai Doshi remained present on 05.10.2019. On the said date they submitted the purchase statement, sublet work details, agreements and ledger copy. However, certain documents like the books of accounts, balance sheet and documents evidencing supporting the purchase statement were not produced therefore time was granted to produce the same till 10.10.2019. c. On 10.10.2019, again the authorized representatives remained present before the answering Respondents and submitted the balance Sheet and a statement showing works contract details however, details of 4 work contract were not produced. Therefore, it is submitted that time was granted to submit such details along with deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Dunkerly Co. (supra) is misconceived because in the said judgment, it is held that in case of works contract, value of goods cannot be determined on the basis of the cost of acquisition of the goods by the contractor and considering taxable event, value of the goods has to be determined solely on the basis of value of the goods at the time of incorporation of the goods in the works. It was, therefore, submitted that with regard to determining the value of the goods it was accepted that the convenient mode for such determination is to take value of the works contract as a whole and deduct therefrom the cost of labour and services rendered by the contractor during the execution of the works contract and the deduction that have to be made is also enumerated in the decision of the Apex Court. It was, therefore, submitted that the respondent has rightly denied the cost plus profit method for determining the value of goods being the taxable turnover as per the decision of the Apex Court. 8.4 Learned Assistant Government Pleader therefore submitted that the taxable turnover has been rightly determined as provided in Section 2 (30) (c) of the Act and the directions issued by this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that as regards the penalty under Section 34 (12) of the Act, only a cyclostyle penalty notice without indicating the nature of infraction has been issued. 6.3 In the overall view of the matter, we are convinced with the submissions canvassed on behalf of the writ applicant that the matter deserves to be remitted to the respondent No. 2 for a fresh consideration with a direction to re-consider the matter, having regard to the materials on record and after hearing the writ applicant. We are not convinced with the method and the manner in which the impugned assessment order came to be passed by the respondent No. 2. In such circumstances, we reject the preliminary contention canvassed on behalf of the respondents that the writ applicant should be asked to prefer the statutory appeal available in law. Mr. Hemani, the learned senior counsel is right in his submission that when the impugned order is bereft of the reasons then, the same could be said to be gross violation of the principles of natural justice and, if that be so, then the alternative remedy should not be a bar in entertaining the writ application. 7. For the foregoing reasons, we allow this writ application in part. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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