2023 (8) TMI 845 - HC - VAT and Sales Tax

Court partially allows writ petition, setting aside Assessment Orders for tax periods due to limitations and natural justice violations.

Smt. M. Lakshmi Devi Versus The Commercial Tax Officer, The State of Andhra Pradesh

The court partly allowed the writ petition. The Assessment Order for the tax period 2008-09 to 2012-13 was set aside as it was barred by limitation under ... Maintainability of petition - availability of efficacious and alternative remedy of appeal - Validity of assessment order - barred by time limitation or not - principles of natural justice. Time Limitation - HELD THAT:- Admittedly, the basis for issuing show cause notice and passing of impugned Assessment Order was the inspection dated 21.05.2013 of V&E Department and its report to the 1st respondent. In such an event, the 1st respondent owes a responsibility to furnish the copy of the said report at least after receiving the request letter dated 08.07.2015 of the petitioner, a copy of which is filed along with material papers. Thus the petitioner was deprived of a valuable opportunity to submit her objections against the said report and impugned Assessment Order - The net result is that though the Assessment Order pertaining to the tax period 2013-14 is within the period of limitation, however, the same is liable to be set aside for non-furnishing of the report of the V&E Department forwarded to the 1st respondent and also non-consideration of subsequent report issued by the V&E Department as claimed by the petitioner and not giving an opportunity of hearing to the petitioner in this regard. In this case, the principles of natural justice were violated and further a major part of assessed period is barred by limitation and thereby, the 1st respondent had no jurisdiction to pass assessment order to that extent. In such an event, this Court can entertain writ petition. The Assessment Order dated 11.01.2019 so far as it relates to the period 2008-09 to 2012-13 (upto November, 2012) is barred by limitation and hence set aside to that extent, however, the said order relating to the tax period 2013-14 is held to be within the period of limitation - Petition allowed in part. Issues Involved:1. Whether the Assessment Order for the tax period 2008-09 to 2012-13 is barred by limitation.2. Whether the principles of natural justice were violated in passing the Assessment Order.3. Maintainability of the writ petition due to the availability of an alternative remedy.Summary:1. Limitation Issue:The petitioner argued that the Assessment Order dated 11.01.2019 for the tax period 2008-09 to 2012-13 is barred by limitation under Section 21 of the AP VAT Act, 2005. The court agreed, stating that the assessment should have been completed within four years from the end of each assessment period. The assessment for these years was indeed completed beyond this period, making it barred by limitation. The court cited the case of Triveni Poly Plast Pvt Ltd. v. The Commercial Tax Officer to support this conclusion.2. Violation of Principles of Natural Justice:The petitioner contended that the V&E department's inspection report, which formed the basis of the Assessment Order, was not furnished to her, depriving her of the opportunity to challenge it. The court found merit in this argument, noting that the 1st respondent did not provide the inspection report despite the petitioner's request. The court referenced Nallana Sambasiva Rao v. State of Andhra Pradesh, emphasizing the obligation to supply such material to ensure fair opportunity for objections. Consequently, the court held that the Assessment Order for the tax period 2013-14 was also liable to be set aside due to this violation.3. Maintainability of Writ Petition:The respondent argued that the writ petition was not maintainable due to the availability of an alternative remedy. The court, however, found no force in this argument, citing Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, which allows exceptions to the general principle when there is a violation of natural justice or when the order is without jurisdiction. Given the violation of principles of natural justice and the limitation issue, the court entertained the writ petition.Conclusion:The court partly allowed the writ petition:(a) The Assessment Order dated 11.01.2019 for the period 2008-09 to 2012-13 was set aside as it was barred by limitation.(b) The Assessment Order for the tax period 2013-14 was set aside for violating principles of natural justice. The 1st respondent was directed to furnish the inspection reports to the petitioner, receive objections, and pass a fresh Assessment Order after a personal hearing. No costs were awarded.