2013 (12) TMI 272 - HC - VAT and Sales Tax

High Court upholds assessment under VAT Act, emphasizes appeal rights

The High Court dismissed the writ petition challenging assessment proceedings under the Andhra Pradesh Value Added Tax Act, 2005 for the period 2008-09 to ... Mode of Service of orders and notices – Held that:- All the notices were sent to the correct address of the petitioner – Following C.C.Alavi Haji v Palapetty Muhammed [2007 (5) TMI 335 - SUPREME COURT OF INDIA] - when a notice is sent by registered post and is returned with a postal endorsement 'refused' or 'not available in the house', it is presumed that the notice is served - Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business - when a notice is sent by registered post and is returned with a postal endorsement 'refused' or 'not available in the house' or 'house locked' or 'shop closed' or 'addressee not in station', due service has to be presumed - The first respondent strictly adhered to the procedure contemplated under Rule 64 of the VAT Rules before passing the assessment order. There was no substance in the contention of the petitioner that the assessment order is in violation of the principles of natural justice - the petitioner cannot straightaway invoke the jurisdiction of this Court under Article 226 of the Constitution of India without resorting to the efficacious alternative remedy available to him under Section 31 of the VAT Act – Decided against Petitioner. Issues:Challenge to assessment proceedings for the period 2008-09 to 2011-12 under the Andhra Pradesh Value Added Tax Act, 2005 based on alleged violation of natural justice principles.Detailed Analysis:The petitioner, a registered dealer, challenged the assessment proceedings conducted by the first respondent, alleging illegality, contravention of law, and violation of natural justice principles. The petitioner contended that the assessment order dated 23.08.2012 was passed without proper enquiry or issuance of a mandatory show-cause notice, as required under Rule 25(5) of the A.P. VAT Rules, 2005. The petitioner claimed non-receipt of the show-cause notice dated 18.7.2012, which formed the basis of the impugned assessment order.The respondent argued that the petitioner had an alternative remedy of appeal under the VAT Act, which should have been exhausted before approaching the High Court under Article 226 of the Constitution of India. The respondent explained the steps taken for assessment, including multiple notices sent to the petitioner's address and email, all of which were allegedly returned undelivered. The respondent maintained that the assessment order was passed in accordance with the law.The petitioner raised objections regarding the validity of service of notices, citing Rule 64 of the VAT Rules, which outlines the mode of service of orders and notices. The petitioner relied on a previous Division Bench decision to support the argument that non-compliance with Rule 64 could vitiate the assessment order. However, the respondent provided evidence of sending notices to the correct address of the petitioner, as per the writ petition, and argued that service by registered post creates a presumption of delivery, as established by legal precedents.The Court analyzed the facts and legal provisions, concluding that the respondent followed the prescribed procedure under Rule 64 of the VAT Rules before issuing the assessment order. The Court distinguished the previous case cited by the petitioner and found no merit in the argument that the assessment order violated natural justice principles. Therefore, the Court dismissed the writ petition, emphasizing the availability of the alternative remedy of appeal under Section 31 of the VAT Act for the petitioner.In the final order, the Court dismissed the writ petition, allowing the petitioner to pursue the remedy of appeal under the law. The judgment clarified that the dismissal did not prevent the petitioner from availing the statutory appeal process. Any related pending petitions were also closed as a consequence of the judgment.