High Court sets aside Assessment Order in Writ Petition due to procedural violations

The High Court allowed the Writ Petition, setting aside the Assessment Order challenged by the petitioner under the Central Sales Tax Act, 1956. The court found that there was a violation of principles of natural justice due to improper service of notices through e-mail and illegal collection of funds without a Garnishee Notice. The matter was remitted to the Assessing Authority for fresh consideration, directing them to adhere to due process and provide the petitioner with a fair opportunity to present their case. No costs were awarded, and pending applications were ordered to be closed.

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Issues:
Challenge to Assessment Order under Central Sales Tax Act, 1956; Validity of service of notices through e-mail; Rejection of 'C' Forms by the Assessing Authority; Illegal collection of funds by the Assessing Authority without serving Garnishee Notice; Violation of principles of natural justice.

Analysis:
The petitioner challenged the Assessment Order passed by the 3rd respondent for the period 2015-16 under the Central Sales Tax Act, 1956. The contention was that the notices issued by the 3rd respondent through e-mail did not comply with Rule 64(1)(b) of the Telangana VAT Rules, 2005. Additionally, the petitioner's 'C' Forms submitted to the office of the 3rd respondent were refused to be acknowledged, leading to further dispute.

The petitioner relied on a previous decision of the Andhra Pradesh High Court in M/s. Godrej Agrovet Ltd. vs C.T.O., Eluru, where the Assessing Authority was directed to accept 'C' Forms even if filed after the finalization of assessments. It was also highlighted that the 3rd respondent had collected funds from the petitioner's bank account without serving a Garnishee Notice, which was deemed illegal.

The learned Special Counsel for Commercial Taxes representing the respondents did not dispute that the service of notices through e-mail was not in line with the applicable Rule. It was acknowledged that an assessee could submit 'C' Forms post the finalization of assessment, emphasizing the openness of this provision.

The High Court, comprising of Justice M.S.Ramachandra Rao and Justice T.Amarnath Goud, concluded that there had been a violation of principles of natural justice causing prejudice to the petitioner. Consequently, the Writ Petition was allowed, setting aside the Assessment Order and remitting the matter to the 3rd respondent for fresh consideration. The 3rd respondent was directed to follow due process, serve a pre-assessment show-cause notice, grant the petitioner an opportunity to file objections, conduct a personal hearing, and pass a reasoned order in accordance with the law.

As a final decision, the Writ Petition was allowed without any order as to costs, and any pending miscellaneous applications in the matter were ordered to be closed.

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