2022 (7) TMI 1115 - HC - VAT and Sales Tax

Court remits matter for review, upholds Tribunal decision, dismisses revision.

M.E. AZEEZ Versus STATE OF KERALA

The Supreme Court remitted the matter back to the Deputy Commissioner to review the orders passed and provide one more opportunity to the dealer. The ... Service of notice beyond time limitation - whether the order in Annexure E is vitiated for any commission or omission by the Deputy Commissioner in making the order dated 30.09.2016 in Annexure E? - suo motu revision under Section 35 is properly exercised and decided by the Deputy Commissioner or not - HELD THAT:- The argument on service of notice and that the revision is beyond the period of limitation prima facie appears to be both unavailable to the dealer and untenable in view of the earlier round of litigation. The Deputy Commissioner was directed by the Supreme Court to give one more opportunity to the dealer and finalize the assessment. The Deputy Commissioner accorded opportunity, and from the order in Annexure E, it is equally evident that the dealer filed a reply. The reply is considered by the Deputy Commissioner, resulting in order in Annexure E. What is under challenge before the Tribunal or what is the consideration is the order in Annexure E. Whether the exercise of suo motu revision by the Deputy Commissioner is correct and whether the order made thereon is sustainable? - HELD THAT:- The Tribunal has given a finding that when fresh assessment proceedings are initiated, the appellant would get a reasonable opportunity of being heard. The appellant would be at liberty to file all objections before the assessing authority and establish the appellant's case that the penalty proceedings cannot be relied upon. In the above circumstances, we find no reason to interfere with the order of the Deputy Commissioner under Section 35 - The dealer did not demonstrate an infirmity in the above-said finding. Revision dismissed. Issues Involved:1. Interpretation of Section 35 of the KGST Act 1963 regarding suo motu revision power.2. Validity of the service of notice by affixture and its implications on the revision process.3. Compliance with principles of natural justice in the revision proceedings.4. Assessment of grounds for challenging the Deputy Commissioner's order under Section 35.5. Review of the Tribunal's decision and its impact on the revision process.Issue 1: Interpretation of Section 35 of the KGST Act 1963 regarding suo motu revision power:The case involved revisions filed under Section 41 of the KGST Act 1963, challenging a common order dated 25.09.2019 in T.A. Nos.6/2017, 7/2017 & 8/2017. The Deputy Commissioner invoked suo motu revisional power under Section 35 of the Act for the dealer registered under the Act. The Supreme Court remitted the matter back to the Deputy Commissioner to review the orders passed and provide one more opportunity to the dealer. The Tribunal confirmed the Deputy Commissioner's order, leading to the revisions. The contention revolved around whether the Deputy Commissioner correctly exercised suo motu revision under Section 35 and if the order was sustainable.Issue 2: Validity of the service of notice by affixture and its implications on the revision process:The petitioner argued that the Deputy Commissioner's order setting aside the assessment for the subject Assessment Year was based on an illegal service of notice by affixture, affecting the dealer's rights adversely. The petitioner contended that affixture, while a mode of service, was not a safe method for notice delivery. The argument focused on the deficiency of service of notice and its impact on the revision process under Section 35.Issue 3: Compliance with principles of natural justice in the revision proceedings:The respondent contended that the petitioner's argument on the violation of principles of natural justice was not available, as the Supreme Court had granted relief to the dealer and provided an opportunity before making an order under Section 35. The respondent emphasized that the Deputy Commissioner accorded the dealer an opportunity and considered the dealer's reply, complying with the directives of the Apex Court. The respondent argued that the extended argument on the deficiency of service of notice was not valid, independent of the findings recorded by the Tribunal.Issue 4: Assessment of grounds for challenging the Deputy Commissioner's order under Section 35:The Court analyzed whether the order in question was vitiated by any commission or omission by the Deputy Commissioner. The focus was on whether the Deputy Commissioner's exercise of suo motu revision under Section 35 was correct and decided appropriately. The Court considered the arguments presented by both parties and reviewed the record to determine the validity of the Deputy Commissioner's order in Annexure E. The Court rejected contentions related to service of notice by affixture, finding no error in the content or calculations of the order.Issue 5: Review of the Tribunal's decision and its impact on the revision process:The Tribunal's decision was scrutinized in light of the arguments presented by the parties. The Court examined the Tribunal's findings and concluded that the grounds raised by the dealer were untenable and lacked merit. The Court upheld the Tribunal's decision and dismissed the revision, along with S.T. Rev. Nos.9 & 10 of 2020, following the same reasoning. No costs were awarded in the final order.This detailed analysis of the judgment highlights the key legal issues addressed by the Court in the matter, providing a comprehensive understanding of the case and its implications under the KGST Act 1963.