2020 (4) TMI 238 - HC - VAT and Sales Tax

High Court Upholds Single Judge Decision on VAT Penalty Challenge

The High Court upheld the Single Judge's decision in a challenge to penalty proceedings under Section 67(1) of the Kerala Value Added Tax Act, 2003, ... Imposition of penalty u/s 67(1) of the Kerala VAT Act, 2003 - violation of principles of natural justice - HELD THAT:- An opportunity of personal hearing was offered in Exts.P8 and P9 notice, on 17.01.2019. But the appellants submitted adjournment applications seeking three week's time, on the premise that they are trying to file the returns and to remit the tax due, in the meanwhile. It was also stated that the Charted Accountant of the appellant is not in station to prepare the documents and to appear for the hearing. Evidently, the 1st respondent adjourned the hearing to 31.01.2019, on accepting the request of the appellant. But on 31.01.2019 also, the appellant submitted applications for adjournment stating the very same reasons. We are not in a position to hold that, the observations contained in the impugned order that the appellant had failed to submit any objections, is factually incorrect. As a consequence, we find no reason to disagree with the learned Single Judge on the findings with respect to the above said aspects - Appeal dismissed. Issues:Challenge to judgment of Single Judge in W.P.(C) No.3521/2020 regarding penalty under Section 67(1) of the Kerala Value Added Tax Act, 2003 and consequential demands.Analysis:The writ petitioner challenged the judgment of the Single Judge, alleging a failure to follow principles of natural justice in finalizing the penalty proceedings under Section 67(1) of the Kerala Value Added Tax Act, 2003. The Single Judge found no justification to entertain the writ petition under Article 226 of the Constitution of India, as there was no evidence of a breach of natural justice. The petitioner argued before the High Court that the 1st respondent failed to consider objections submitted regarding the penalty imposition notices. Upon review, it was revealed that the appellant had requested adjournments without mentioning any objections in the applications. Although the appellant claimed to have submitted objections, no evidence existed in the respondent's file to support this claim. Consequently, the High Court upheld the Single Judge's decision, finding no reason to interfere with the judgment.The High Court clarified that if the petitioner were to appeal to the appropriate authority and the delay was condoned, they would have the opportunity to raise all contentions, including the objections claimed to have been submitted. The writ appeal was disposed of with this clarification.