2019 (6) TMI 1346 - HC - VAT and Sales Tax

Court sets aside penalty order under Kerala VAT Act due to lack of natural justice, remits for fair reconsideration.

The Court set aside the order for determining a penalty under the Kerala Value Added Tax Act, 2003, due to a violation of principles of natural justice. ... Enquiry issued under Section 47(6) of the Kerala Value Added Tax Act, 2003 - ex-parte order - denial of opportunity of hearing - principles of natural justice - whether the quick succession of dates from Exts.P1 to P4, amounts to affording reasonable opportunity or there is violation of principles of natural justice? - HELD THAT:- This Court has difficulty in accepting the contention now vehemently put forward by the learned Government Pleader, for the petitioner at no point of time tried to procrastinate the enquiry and the one adjournment, which he is otherwise legally entitled to is also brushed aside in haste. Ext.P4 is set aside as contrary to principles of natural justice - The matter is remitted to first respondent for consideration and disposal in accordance with law - petition allowed by way of remand. Issues involved:1. Violation of principles of natural justice in an enquiry process under the Kerala Value Added Tax Act, 2003.2. Denial of opportunity of hearing to the petitioner in the enquiry process.3. Justification of the order by the Government Pleader.4. Affording reasonable opportunity and adherence to principles of natural justice in the enquiry process.Analysis:1. The petitioner received a notice of enquiry under Section 47(6) of the Kerala Value Added Tax Act, 2003, and requested time for submitting a reply or participating in the enquiry. The respondents passed an order determining a penalty without giving the petitioner a proper opportunity of hearing. The petitioner challenged the order citing it as ex-parte and emphasizing the denial of a fair chance to present their case during the enquiry.2. The petitioner's counsel argued that the order was passed in haste without considering the petitioner's request for an adjournment, which was sent via email. The Government Pleader defended the order, stating that the petitioner should have responded earlier and that the delay in receiving the request for an adjournment justifies the order. However, the Court found that the quick succession of dates from the notice to the final order did not afford the petitioner a reasonable opportunity to be heard, highlighting a violation of principles of natural justice.3. The Government Pleader's objections did not dispute the necessity of fair play and providing a reasonable time to the petitioner as per the notice. The Court noted that the petitioner did not try to delay the enquiry and was entitled to at least one adjournment, which was not considered adequately. The Court set aside the order as contrary to principles of natural justice and remitted the matter back to the first respondent for reconsideration and disposal in accordance with the law.4. The Court directed the petitioner to appear before the first respondent on a specified date with necessary documents and explanations. The first respondent was instructed to complete the enquiry process and pass orders within a stipulated timeframe, ensuring adherence to principles of natural justice. The writ petition was disposed of accordingly, emphasizing the importance of affording a fair opportunity to be heard in such proceedings.