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of <h1>Court upholds constitutionality of PVAT Act Section 29(7), affirms administrative process, dismisses petitions.</h1> <h3>M/s Surbhi Armouring Incorporation, Bulandpur Versus The State of Punjab and others</h3> M/s Surbhi Armouring Incorporation, Bulandpur Versus The State of Punjab and others - [2015] 78 VST 257 (P&H) Issues Involved:1. Constitutionality of Section 29(7) of the Punjab Value Added Tax Act, 2005 (PVAT Act).2. Violation of principles of natural justice.3. Legality of the order dated 29.1.2014 and consequential notices dated 5.2.2014 and 17.6.2014.Issue-wise Detailed Analysis:1. Constitutionality of Section 29(7) of the PVAT Act:The petitioner challenged Section 29(7) of the PVAT Act as unconstitutional, arguing it violates Article 19(1)(g) of the Constitution of India and principles of natural justice. The court noted that Section 29(7) empowers the designated officer to amend an assessment order within three years if under-assessment of tax is discovered due to fraud, wilful neglect, misrepresentation of facts, or escaped turnover, but requires prior permission from the Commissioner and an opportunity of hearing to the affected person. The court found this provision reasonable and not unconstitutional, as it includes safeguards like prior permission from a higher authority and a subsequent hearing.2. Violation of Principles of Natural Justice:The petitioner contended that no opportunity of hearing is provided before the Commissioner grants permission to amend the assessment order, which is arbitrary and unreasonable. The court referred to various Supreme Court judgments, including *Assistant Commissioner, Assessment II, Bangalore vs. Velliappa Textiles Limited* and *Subramanian Swamy vs. Manmohan Singh*, which held that granting of sanction is an administrative act and does not require a hearing at that stage. The court concluded that the prior permission by the Commissioner is an administrative function aimed at safeguarding the dealer's interests and does not necessitate a hearing. The opportunity for hearing is provided when the designated officer proceeds to amend the assessment order after obtaining the Commissioner's approval.3. Legality of the Order Dated 29.1.2014 and Consequential Notices:The petitioner sought to quash the order dated 29.1.2014 by the Excise and Taxation Commissioner and the consequential notices dated 5.2.2014 and 17.6.2014 issued by the Assistant Excise and Taxation Commissioner. The court examined Rule 49 of the Punjab VAT Rules, which mandates issuing a notice specifying grounds for the proposed amendment and providing a reasonable opportunity of being heard before enhancing the tax liability. The court found that these procedural safeguards were in place, ensuring compliance with principles of natural justice at the appropriate stage. Consequently, the court held that the order and notices were legally valid and could not be faulted.Conclusion:The court dismissed the petitions, upholding the constitutionality of Section 29(7) of the PVAT Act and affirming that the procedural safeguards provided under the Act and Rules adequately protect the principles of natural justice. The court found no merit in the petitioner's arguments and validated the actions taken by the tax authorities.
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