2024 (1) TMI 175 - HC - VAT and Sales Tax

Writ petition challenging assessment order dismissed for natural justice violation claim and available alternative remedy

M/s. Sri Vijayalakshmi Filling Station, Versus Commercial Tax Officer (FAC), State of Andhra Pradesh, District Public Transport Officer (DPTO),

The AP HC dismissed a writ petition challenging an assessment order, ruling it was not maintainable on two grounds. First, the court rejected the ... Maintainability of petition - availability of alternative remedy - whether the petitioner has not disclosed the sales to the 3rd respondent in its books of account - Violation of principles of natural justice - HELD THAT:- The particulars of the report were already mentioned in the show cause notice and the petitioner did not challenge the same. More so, the contents of the report are not new to the petitioner as those contents relate to the sales effected by the petitioner to the 3rd respondent for a specific period. Therefore, the contents of the report cannot be said to contain altogether unknown facts without which the petitioner cannot give an effective reply. Therefore, the petitioner’s plea cannot be accepted. Availability of efficacious alternative remedy of appeal against the impugned Assessment Order - HELD THAT:- On this ground also the writ petition is not maintainable. The writ petition is dismissed. Issues Involved:1. Challenge to Assessment Order imposing VAT on supply of diesel.2. Allegation of violation of principles of natural justice in passing the Assessment Order.Issue 1: Challenge to Assessment Order imposing VAT on supply of dieselThe petitioner challenged the Assessment Order dated 26.06.2023, seeking to quash the order imposing VAT on the supply of diesel to the 3rd Respondent. The petitioner contended that the order was illegal, arbitrary, and in violation of natural justice principles. The petitioner further requested re-adjudication of the issue after providing an opportunity for objections and a personal hearing. Alternatively, if the petitioner was liable to pay tax, the 3rd Respondent was to pay the VAT liability directly to the 1st Respondent.The petitioner, engaged in trading petroleum products, was alleged to have supplied high-speed diesel to the 3rd Respondent without accounting for the sales in its books. The 1st respondent claimed the petitioner supplied a significant amount of HSD oil for a specific period, which was not reflected in the accounts. Despite show cause notices and personal hearing opportunities, the petitioner failed to respond due to health reasons, leading to the imposition of tax under the AP VAT Act and Rules.Issue 2: Allegation of violation of principles of natural justiceThe main argument raised by the petitioner was the non-furnishing of the sales report by the 3rd respondent, which was the basis for the Assessment Order. The petitioner contended that without the report, they were unable to effectively respond to the show cause notice, alleging a breach of natural justice principles. However, the Government Pleader argued that the information provided in the notice was sufficient for the petitioner to compare with their records and respond adequately. The Government Pleader further emphasized that the petitioner had multiple opportunities to engage in the process but failed to do so, indicating no violation of natural justice.The court, after considering the arguments, found merit in the Government Pleader's position. It noted that the information regarding sales was available to the petitioner through the show cause notice, and the petitioner's failure to respond to subsequent notices weakened their claim of non-receipt of the sales report. The court also distinguished a previous case cited by the petitioner, highlighting that the facts in the current case did not support a violation of natural justice.In conclusion, the court dismissed the writ petition, emphasizing that the petitioner had an alternative remedy of appeal against the Assessment Order. No costs were awarded, and pending interlocutory applications were closed.