Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 12TH DAY OF OCTOBER 2022 / 20TH ASWINA, 1944 WP(C) NO. 31201 OF 2022 PETITIONER:
M/S SAJ BATTERIES PVT. LTD.
18/1490, KALLUTHANKADAVU, PUTHIYARA P.O, CALICUT, PIN - 673004 REPRESENTED BY ITS MANAGER JIJO V CHERIAN BY ADVS.
G.HARIKUMAR (GOPINATHAN NAIR) AKHIL SURESH RESPONDENTS:
1 THE COMMERCIAL TAX OFFICER 3RD CIRCLE, DEPARTMENT OF COMMERCIAL TAXES KOZHIKODE, PIN - 673001 2 THE DEPUTY COMMISSIONER SGST, STATE TAX OFFICE, GST BHAVAN, SALES TAX COMPLEX, JAWAHAR NAGAR, CALICUT, PIN - 673006 3 THE JOINT COMMISSIONER SGST, STATE TAX OFFICE, GST BHAVAN, SALES TAX COMPLEX, JAWAHAR NAGAR, CALICUT, PIN - 673006 ADV. THUSHARA JAMES (SR GP) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P.(C)No.31201 of 2022 2 JUDGMENT Dated this the 12
th day of October, 2022 Petitioner has approached this Court challenging Exts.P10 and P11 orders of assessment for the assessment years 2008-2009 and 2010-2011 under the provisions of the Kerala Value Added Tax Act. It is the case of the petitioner that the entire assessment is based on certain documents produced by a Tax Practitioner, who was earlier engaged by the petitioner and who had actually cheated the petitioner by producing incorrect documents before the Tax authorities in order to prejudice the petitioner.
2.
The brief facts of the case will show that the petitioner initially suffered Exts.P1 and P2 orders of assessment which was upheld by the Appellate Authorities including the Appellate Tribunal and also in Tax Revision by Division Bench of this Court. However, the entire proceedings culminating in the order of this Court in the Tax Revisions appear to have been set at naught by Ext.P6 judgment of this Court, which found that since the entire assessment was based on certain incorrect documents and
W.P.(C)No.31201 of 2022 3 materials placed by the Tax Practitioner of the petitioner, (which even lead to initiation of criminal proceedings at the instance of the petitioner against the said Tax Practitioner) it would be unfair and improper to require the petitioner to meet the demands raised in the orders of assessment.
3.
A reading of Ext.P6 judgment suggests that this Court was compelled to take that view taking into account the findings of the Investigating Agency in the final report which was marked as Ext.P12 in the proceedings which led to Ext.P6 judgment. Following the directions contained in Ext.P6 judgment, the matter appears to have been again taken up by the Assessing Authority who issued Exts.P10 and P11 orders of assessment which are now impugned in the present writ petition.
4.
Sri. G.Harikumar, the learned counsel appearing for the petitioner would contend that Exts.P10 and P11 orders of assessment are liable to be set aside on account of the fact that they were not preceeded by any opportunity of hearing to the petitioner and also on
W.P.(C)No.31201 of 2022 4 account of the fact that though the petitioner sought for cross-examination of the Tax Practitioner in question as also certain Officers of the Tax Department before proceedings are finalized, that request was turned down by the Assessing Officer even while issuing Exts.P7 and P8 notices.
5.
It is submitted that the fact that no opportunity of hearing was given to the petitioner and that the request for cross-examination was denied, it is evident from the impugned assessment orders itself where from which it can be seen that the hearing provided to the petitioner was the one provided to them even prior to the issuance of Exts.P7 and P8 notices under Section 25(1) of the Kerala Value Added Tax Act. It is submitted that Exts.P7 and P8 notices also reveal without doubt that the request of the petitioner for cross-examination was denied even at the stage of notice. It is submitted that considering the tone and tenor of Ext.P6 judgment and the circumstances which lead to the unprecedented step of setting aside an assessment which have been affirmed even at the stage of
W.P.(C)No.31201 of 2022 5 Tax Revision by a Division Bench of this Court, it was highly improper to deny the request of the petitioner for cross-examination.
6. The learned Senior Government Pleader, vehemently opposes the grant of any relief to the petitioner, firstly by stating that the impugned orders are orders of assessment, which can be challenged appropriately in appellate proceedings. It is submitted that there is no rhyme or reason for the petitioner to directly approach this Court and challenge Exts.P10 and P11 assessment orders in proceedings under Article 226 of the Constitution of India. It is submitted that there was no reason for the Assessing Officer to allow cross-examination of the Tax Practitioner etc. on account of the fact that the petitioner has no case that it had not authorized the concerned Tax Practitioner to present its case before the Assessing Authority and absolutely no purpose will be served by cross-examining the petitioner's own agent who appeared and represented the petitioner in the earlier proceedings. It is submitted that sufficient opportunity was
W.P.(C)No.31201 of 2022 6 given to the petitioner to prove its case and the question of violation of principles of natural justice does not arise for consideration.
7.
Having heard the learned counsel appearing for the petitioner and the learned Senior Government Pleader, I am of the opinion that this writ petition is to be allowed.
The circumstances which compel me to hold so are the following;
(i) It is evident from a reading of Exts.P10 and P11, that the petitioner was not given an opportunity of hearing after notices were issued under Section 25(1) of the Kerala Value Added Tax Act. This in my opinion constitutes violation of principles of natural justice and therefore notwithstanding the availability of an alternative remedy it is open to the petitioner to challenge Exts.P10 and P11 directly in this Court as it is well settled that violation of principles of natural justice is one ground upon which a person aggrieved can approach this Court directly under Article 226 of the Constitution of India, not withstanding the availability of an alternative remedy;
W.P.(C)No.31201 of 2022 7 (ii) It is evident from Exts.P7 and P8 that the petitioner's request for cross-examination was denied by the Assessing Officer even at the time when notice under Section 25(1) of the Kerala Value Added Tax Act. The tone and tenor of the judgment of this Court in Ext.P6 suggests that this Court was atleast prima facie convinced that there was some fraud which lead to the finalization of the assessment against the petitioner in the earlier round of assessment. This fact appears to have compelled this Court to take the view that the assessments ought to be set aside despite the fact that they were earlier affirmed by the Division Bench of this Court in Tax Revisions filed before this Court. A reading of Ext.P6 judgment suggests that it would only be appropriate that the petitioner be given an opportunity of cross-examination to prove that the earlier assessment was only on the basis of wrong and incorrect facts and documents presented before the authorities as otherwise the petitioner would not be able to establish that the petitioner is not liable for the demands arising out of Exts.P10 and P11.
In the light of the aforesaid findings, Exts.P10
W.P.(C)No.31201 of 2022 8 and P11 assessment orders are quashed. The petitioner shall mark appearance before the 3rd respondent on 27.10.2022 at 11.00 am. The 3rd respondent shall thereafter reconsider the matter also taking into consideration the observations contained in this judgment.
I make it clear that I have not expressed any opinion on the merits of the matter. It is open to the 3rd respondent to decide the matter in accordance with the law and on the basis of the materials that may be available to the 3rd respondent in the proceedings conducted before him.
This writ petition is disposed of as above.
Sd/- GOPINATH P.
JUDGE SK/13.10
W.P.(C)No.31201 of 2022 9 APPENDIX OF WP(C) 31201/2022 PETITIONER'S EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2008-09 EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2010-11 EXHIBIT P3 TRUE COPY OF THE RTI APPLICATION DATED 10/04/2015 EXHIBIT P4 TRUE COPY OF THE REPLY TO THE RTI APPLICATION DATED 04/05/2015 EXHIBIT P5 TRUE COPY OF THE FINAL REPORT IN CRIME NO. 88/2015 OF KASABA POLICE STATION, KOZHIKODE WHICH IS NOW PENDING AS CC NO. 344/2018 IN THE FILES OF JFCM IV, KOZHIKODE EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 27/02/2019 IN W.P(C) NO. 4760/2019 EXHIBIT P7 TRUE COPY OF THE NOTICE DATED 05/03/2021 FOR THE ASSESSMENT YEAR 2008-09 EXHIBIT P8 TRUE COPY OF THE NOTICE DATED 04/03/2021 FOR THE ASSESSMENT YEAR 2010-11 EXHIBIT P9 TRUE COPY OF THE REPLY DATED 16/08/2021 FILED AGAINST EXHIBITS P7 AND P8 NOTICES EXHIBIT P10 TRUE COPY OF THE ORDER DATED 09/08/2022 FOR THE ASSESSMENT YEAR 2008-09 EXHIBIT P11 TRUE COPY OF THE ORDER DATED 09/08/2022 FOR THE ASSESSMENT YEAR 2010-11 RESPONDENTS' EXHIBITS: NIL