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Suzion Infrastructure Service ... vs The Commercial Tax Officer (W.C) on 2 June, 2010

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Kerala High Court
Jamal T.A vs Commercial Tax Officer on 28 February, 2011




WP(C).No. 6190 of 2011(W)

                      ...  Petitioner


                       ...       Respondent


                For Petitioner  :SRI.TOMSON T.EMMANUEL

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.K.ABDUL REHIM

 Dated :28/02/2011

 O R D E R
                      C.K.ABDUL REHIM, J
                  W.P(C) No.6190 of 2011-W
         Dated this the 28th day of February, 2011.

                         J U D G M E N T

Ext.P7 order of assessment finalised against the petitioner with respect to the year 2008-09 is challenged in this writ petition, without taking recourse to statutory appeal on the specific ground that the assessment was finalised in violation of the mandatory procedure prescribed under Section 25(1) of the Kerala Value Added Tax Act (KVAT Act) as well as in violation of the principles of natural justice.

2. The specific contention of the petitioner is that on receipt of proposal for finalising the assessment, the petitioner had submitted detailed objections. But the assessing authority had rejected all those contentions and confirmed the proposal in a unilateral manner, without affording any opportunity of hearing to the petitioner. It is pointed out that if the assessing authority was not convinced of the objections submitted against the proposal, W.P(C) No.6190 of 2011-W 2 such authority ought to have afforded an opportunity of personal hearing to the petitioner, before finalisation of the assessment, as contemplated under the proviso to Section 25(1) of the Act. Learned counsel for the petitioner relies on a decision of this Court in Suzion Infrastructure Service Ltd. V. Commercial Tax Officer (W.C), Ernakulam (2010(3) KHC 299 (Ker) to content that, non-compliance of the mandatory procedure prescribed will vitiate the order of assessment. It is also contended that the liability with respect to the assessment is unsustainable in view of the dictum laid by the Hon'ble Supreme Court in State of Karnataka V Azad Coach Builders Pvt. Ltd. and another (2010) 36 VST 1 (SC).

3. On a perusal of Ext.P7 impugned order, I notice that the petitioner had filed a detailed reply to the proposal notice. The contention raised in the reply has been elaborately illustrated in the impugned order. It is evident that the assessing authority had considered such objections on a unilateral basis without affording any opportunity of W.P(C) No.6190 of 2011-W 3 hearing to the petitioner. Going by the proviso to Section 25(1), as held in the decision cited above, it is mandatory on the part of the assessing authority to afford an opportunity of hearing to the petitioner before finalising the assessment, if the contentions raised are not acceptable. Further, I notice that principles of natural justice insist that such opportunity of hearing need be afforded. Under such circumstances, I am of the view that the impugned order could not withstand the test of sustainability under law. Hence I am of the view that the matter need reconsideration at the hands of the assessing authority.

4. Therefore, the writ petition is allowed, quashing Ext.P7. The 1st respondent is directed to pass fresh orders after affording an opportunity of hearing to the petitioner. Needless to say that, the petitioner shall be provided liberty to produce books of accounts and other documents in support of the objections. The assessing authority is directed to take note of all the contentions which may be raised based on the decision of the Hon'ble Supreme Court W.P(C) No.6190 of 2011-W 4 (cited supra).

5. Fresh orders in this regard shall be issued as early as possible, at any rate within a period of one month from the date of receipt of a copy of this judgment.

6. A further complaint was raised by the petitioner to the effect that, inspite of credit given to input tax relating to opening stock, no refund has been effected inspite of specific request made under Ext.P2. The 1st respondent will take necessary action in this regard, without any further delay.