2016 (7) TMI 118 - HC - VAT and Sales Tax

Court sets aside assessment order over lack of natural justice, remands for fresh assessment

M/s. Otis Elevator Company (India) Limited Versus Union of India and Others

The Court set aside the assessment order due to a lack of consideration for natural justice principles and failure to address whether the transactions ... Interstate sale or not - challenge to the order on the ground that the said order is one unfairly passed recklessly non compliant with the principles of natural justice - Held that:- The matters are remanded to the Commercial Tax Officer, Works Contract and Leasing Tax Zone-II Jaipur to address the question as to whether the transactions in issue were “intra state sales” or “inter state sales”, taking into consideration the respective submissions of the parties. The assessing officer is directed to pass a reasoned and speaking order. - Decided in favor of petitioner. Issues Involved:Challenge to assessment order on grounds of natural justice and judicial indiscipline.Analysis:The petitions challenged an assessment order passed by the Commercial Tax Officer, Works Contract and Leasing Tax Zone-II, Jaipur. The petitioner argued that the order was unfairly passed, not compliant with natural justice principles, and overlooked the specific case of the petitioner regarding the sale transaction being an 'inter-state sale.' Reference was made to a previous judgment where the Supreme Court entertained a Special Leave in Civil Appeal due to the assessing officer disregarding settled law. The petitioner contended that the order was vitiated by non-application of mind and contravention of natural justice principles.In response, the department acknowledged that the issue of whether the sale and installation of 'lifts' constituted an 'inter-state sale' or a sale within Rajasthan was a mixed question of law and fact. The department agreed that the assessing authority had not addressed this crucial question in the impugned assessment order. Consequently, it was conceded that the matter should be remanded to the Assessing Authority for a fresh assessment specifically addressing whether the transactions were 'intra-state' or 'inter-state sales.'After hearing both parties and examining the assessment order, the Court set aside the impugned orders dated 22-4-2016. The matters were remanded to the Commercial Tax Officer to determine whether the transactions were 'intra-state' or 'inter-state sales,' considering the submissions of both parties. The assessing officer was directed to pass a reasoned order, emphasizing the importance of natural justice principles and adherence to directions from the appellate authority.The Court clarified that setting aside the orders and remanding the matter was solely based on the contravention of natural justice principles and the failure to consider the specific case of the petitioner regarding the nature of the transactions. The assessing officer was granted the freedom to decide the issues based on the evidence before it. A fresh assessment order was required to be passed within twelve weeks from the date of receipt of the Court's order, ensuring a fair and comprehensive examination of the transactions.Finally, the petitions were disposed of, and it was directed that a copy of the order be placed in all connected cases, ensuring consistency in the application of legal principles across related matters.