2021 (4) TMI 128 - HC - VAT and Sales Tax

Court quashes assessment order for lack of natural justice; remits for fresh assessment within six weeks.

M/s. Popular Motor Corporation Versus The Asst. Commissioner, The Intelligence Inspector, State Of Kerala

The Court quashed the assessment order due to a violation of natural justice principles. Despite a stay granted in a previous writ petition related to ... Violation of principles of natural justice - failure to to produce the order till despatch of the order - Penalty imposed on suppressed turnover - HELD THAT:- This Court had issued notice before admission and granted stay in respect of the proceedings pertaining to the alleged defect No.10 pointed out in the revised notice under Section 25(1) of the KVAT Act which is placed on record at Ext.P3. The impugned order at Ext.P1 is quashed and set aside and the matter of assessment is remitted to the concerned officer for deciding the same afresh after hearing the petitioner and after considering the effect of the orders passed by this Court - petition allowed by way of remand. Issues: Violation of principles of natural justice in assessment orderAnalysis:The petitioner sought to quash the assessment order, claiming it was passed in violation of principles of natural justice. The petitioner argued that an amount of Rs. 75,00,000 was added due to a detected suppressed turnover as defect No.10, despite a stay granted by the Court in a previous writ petition. The petitioner had approached the Court in W.P.(C). No.17912 of 2020, where all penalty proceedings related to the alleged suppressed turnover were stayed. The petitioner contended that the Assessing Officer should not have added the suppressed turnover as the Court had stayed proceedings related to that aspect. The Government Pleader opposed the petition, stating that the petitioner failed to produce the order passed by the Court in the previous writ petition until the order was dispatched, questioning the claim of violation of natural justice.Upon considering the submissions and materials, the Court noted that the Assessing Officer had pointed out defect No.10 in the revised notice under Section 25(1) of the KVAT Act (Ext.P3). However, the Court had issued a notice before admission and granted a stay in the previous writ petition concerning the alleged defect No.10. The Court found that the impugned assessment order at Ext.P1 was passed without regard to the stay granted in the previous writ petition. Consequently, the Court quashed and set aside the impugned order, remitting the matter back to the 1st respondent for fresh assessment. The petitioner was directed to appear before the officer entrusted with the assessment and cooperate for an expeditious assessment, to be completed within six weeks from the date of communication of the judgment.