2017 (12) TMI 1722 - HC - VAT and Sales Tax

High Court overturns tax order due to lack of fair opportunity

The High Court of Patna set aside an ex parte order imposing a tax liability of Rs. 10,99,949.00 under the Bihar Value Added Tax, 2005, due to the ... Principles of Natural Justice - ex-parte order - Bihar VAT Act - HELD THAT:- The order itself indicates that it is ex parte order, and therefore, in the interest of fair play, the impugned order passed by the Commercial Tax Officer, Buxar under Section 31 & 39 of the Bihar Value Added Tax, is also set aside. The petitioner will appear before the Assistant Commissioner, Commercial Taxes, Buxar Circle, Buxar with a copy of this order on the 4th of January, 2018. The Assistant Commissioner, thereafter, will fix a date for hearing of the matter in which the petitioner shall render full cooperation and will not try to play games by seeking frivolous adjournment or avoid proper assistance in the adjudication. Application disposed off. Issues: Lack of proper opportunity for defense in a tax liability matter under Bihar Value Added Tax, 2005.The High Court of Patna, in its judgment, acknowledged that the petitioner was not afforded a fair opportunity to explain or defend against the liability imposed by an ex parte order dated 25.01.2016 under Section 33 of the Bihar Value Added Tax, 2005. The Court found the order to be ex parte, indicating a lack of fair play. Consequently, the impugned order fixing a liability of Rs. 10,99,949.00 and the consequential notice dated 27.01.2016 were set aside in the interest of justice.The Court directed the petitioner to appear before the Assistant Commissioner, Commercial Taxes, Buxar Circle, Buxar, with a copy of the order on 4th January 2018. The Assistant Commissioner was instructed to schedule a hearing where the petitioner must cooperate fully without resorting to frivolous adjournments or avoiding assistance. The decision on the matter would be based on the petitioner's explanations and participation in the adjudication process.The writ application was disposed of with the above directions, providing the petitioner with an opportunity to present their case before the tax authority in a fair and transparent manner. The judgment emphasized the importance of due process and the right to a proper defense in matters of tax liabilities under the Bihar Value Added Tax, 2005.