M/S.Pps Traders vs. Assistant Commissioner Of State Tax -Ii

The petitioners in both the writ petitions, as assessees, suffered adverse assessment orders. It was on the premise that some of the C-forms they produced are bogus. The assessments relate to 2014-15. Later, the Deputy Commissioner, Malappuram, issued the Ext.P2 notice under Section 56 of the Kerala Value Added Tax Act (KVAT Act). It is a proposal to cancel the Ext.P1 assessment order and for suo motu revision. Eventually, the Deputy Commissioner passed the Ext.P3 order, setting aside the Ext.P1 assessment order and requiring the assessing authority to redo the assessment.

The petitioners challenged the Ext.P3 in a revision and, pending that revision, they have filed a writ petition. Then they also obtained a stay. This Court directed the revision authority to stay further proceedings until the revision was decided. Eventually, the revision petition was dismissed. Later, through the Ext.P8, the assessing authority reassessed the petitioners under Section 25(1) of the KVAT Act. Assailing the Ext.P8 order of assessment, the -6- W.P.(C). Nos. 36592 & 36628 of 2018 petitioners have filed these writ petitions.

Sri Premjit Nagendran, the petitioners' counsel, has strenuously contended that the Ext.P8 suffers on two counts: (1) the authorities have violated the principles of natural justice and have denied essential information to the petitioners; (2) the authorities lack the power to reassess the petitioners' liability for the year 2014- 2015, for under the 101st Constitutional amendment, the very KVAT Act has ceased to exists.

Sri Nagendran has drawn my attention to the Ext.P2 notice. The notice informs the petitioners that the authorities came to know about the alleged bogus C-forms, based on the special investigation the Commercial Taxes Department conducted. According to him, despite the petitioners' specific request, the authorities have not supplied a copy of the special investigation report. In this context, Sri Nagendran further draws my attention to the Ext.P4 reply by the Assistant Commissioner. According to him, though the official has informed the petitioners that a copy was attached, what he sent was only a tabular form of the C-Form details, but not the very report.

Dr. Thushara James, the Government Pleader, on the other hand, submits that the Deputy Commissioner’s Ext.P3 order setting

Heard Sri Premjit Nagendran, the learned counsel for the petitioners and the learned Government Pleader.

To begin with, if I rule on the alternative remedy, I must not advert to the merits. For this Court’s observations, even incidental, may affect the petitioners’ rights before the appellate forum. Here is an exception.

The petitioners have pleaded about the alleged violation of the natural justice. That plea taken on its face value, the constraint of the alternative remedy does not affect the adjudication. But once the Court rules negatively on that plea—the plea of natural justice—then it ill behooves for me to rule on the merits, too. Let the statutory

So, first, I will confine my discussion to the alleged vice of the authorities’ violating the principle of natural justice. If the finding turns out positive, then that obviates further adjudication; if negative, I will relegate the petitioners to their statutory remedies.

The petitioners’ plea is that they were denied access to a vital piece of information, and that disabled them from effectively defending themselves in the assessment proceedings. The information they sought concerns the special investigation report.

As the Government Pleader has rightly contended, it is a matter of proving the genuineness of C-forms. The petitioners, in fact, produced replies from the authorities of various other States testifying to the genuineness of other unrelated C-forms. But about the C-forms in dispute, there is no material. As the petitioners alone could vouch for the genuineness of the C-forms, I reckon the petitioners' insistence on the special investigation report serves no purpose. The burden, in fact, squarely lies on the petitioners to prove that the C-forms are genuine. Put explicitly, if a document is suspected, the source of suspicion is of no consequence, even a whisper of doubt may cast a cloud on the genuineness of an -9- W.P.(C). Nos. 36592 & 36628 of 2018 instrument. Then, it is the originator of the instrument that should dispel the clouds of suspicion. In this context, I am constrained to hold that there is no infraction of principles of natural justice.

Indeed, both the petitioners' counsel and the Government Pleader have advanced elaborate arguments on the merits. I need not go into them, for the petitioners have an efficacious alternative remedy. Then, it is inappropriate for me to observe on merits, lest it should prejudice the petitioners' case.

I, therefore, hold that the Ext.P8 is an order against which the petitioners have a statutory remedy, and it is efficacious, too. I, therefore, close the writ petitions, holding that the petitioners, if advised, can approach the appellate authority and raise all pleas as they have done before this Court. No order on costs. DAMA SESHADRI NAIDU JUDGE das