2014 (9) TMI 667 - HC - VAT and Sales Tax

Court quashes VAT re-assessment order for lack of personal hearing violating natural justice

M/s LARSEN AND TOUBRO LTD Versus STATE OF KARNATAKA And OTHERS

M/s LARSEN AND TOUBRO LTD Versus STATE OF KARNATAKA And OTHERS - TMI Issues:Re-assessment order challenged under Section 39 of the Karnataka Value Added Tax Act, 2003; Allegation of denial of personal hearing violating principles of natural justice; Incorrect dates mentioned in the impugned order; Opportunity for petitioner to be heard in person sought.Analysis:The judgment concerns the challenge to a re-assessment order under Section 39 of the Karnataka Value Added Tax Act, 2003. The petitioner filed returns for the assessment year 2007-08, following which re-assessment proceedings were initiated. The petitioner contended that despite seeking personal hearing on 27/05/2014, no such opportunity was granted before the re-assessment order was passed on 31/05/2014. The petitioner alleged a violation of principles of natural justice, arguing that certain dates in the order were incorrect and that the order was not in accordance with the law.During the proceedings, the petitioner emphasized the importance of a personal hearing to present its case effectively. The respondent authority, on the other hand, argued that the petitioner had ample opportunity to appear and present its case, implying that the petitioner's claim of being denied a chance to establish its case was unfounded. The court examined the impugned order dated 31/05/2014 and noted that while the petitioner had indeed requested a personal hearing, there was no clear indication of the date on which the petitioner appeared before the authority. The court found the recording of a personal hearing in the order to be incorrect due to the absence of such a hearing.Consequently, the court set aside the impugned order and directed the petitioner to appear before the authority without the need for a separate notice. The petitioner was instructed to present its case through an authorized representative, and the authority was tasked with passing a fresh order in compliance with the law after considering the petitioner's submissions. The judgment emphasized the petitioner's right to be heard in person and the necessity for a proper opportunity to explain the details relevant to the case before the authority.In conclusion, the court quashed the impugned order, leaving all contentions open for both parties. It was further stated that if the petitioner failed to appear before the authority on the specified date, the impugned order would be given effect. The judgment underscored the significance of providing a fair opportunity for the petitioner to present its case and highlighted the importance of adhering to principles of natural justice in administrative proceedings.