Karvy Innotech LTD. vs. State Tax Officer - Kerala High Court, 17 February 2022

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS THUR AY, THE 17TH DAY OF FEBRUARY 2022 / 28TH MAGHA, 1943 WP(C) NO. 4238 OF 2022 PETITIONER: M/S.KARVY INNOTECH LTD. (EARLIER KNOWN AS HCL SERVICES LTD), IKON DOOR NO.33/1303 G, C/O. BHAGAVATHY TRADERS PVT LTD, OPP. JUMA MASJID, CHALIKKAVATTOM EAST, VENNALA, KOCHI - 682028, REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE MR. ABHISHEK VAISHYA. BY ADVS. A.KUMAR P.J.ANILKUMAR G.MINI(1748) P.S.SREE PRASAD JOB ABRAHAM RESPONDENTS: 1 STATE TAX OFFICER FOURTH CIRCLE, SGST DEPARTMENT, ERNAKULAM - 682018. 2 THE VAT OFFICER SPECIAL CIRCLE II, DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM – 682015. 3 DEPUTY COMMISSIONER OF STATE TAX SGST DEPARTMENT, CIVIL STATION, KAKKANAD, KOCHI - 682030. OTHER PRESENT: ADV.M.M.JASMINE-GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.02.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 4238 OF 2022 2 BECHU KURIAN THOMAS, J. =========================== W.P.(C) No.4238 of 2022 ============================ Dated this the 17th day of February, 2022 JUDGMENT Petitioner challenges two orders of assessment dated 29.04.2021, produced as Ext.P4 and Ext.P5. Ext.P4 is an order of assessment under Section 25(1) of the Kerala Value Added Tax Act, 2003, (for short KVAT) while Ext.P5 order of assessment relates to an assessment under the Central Sales Tax Act, 1956 (for short CST) for the assessment year 2017-18. 2. The solitary contention raised by the petitioner, in assailing both the orders of assessment, is based upon violation of the principles of natural justice. According to Shri.A.Kumar, the learned counsel, petitioner was never served with a notice before the orders of assessment were issued. Referring to the observations in the impugned orders, the learned counsel

WP(C) NO. 4238 OF 2022 3 submitted that the re-assessment proposal initiated by the assessing officer was send to an incorrect address despite correct address being available with the assessing officer. In the absence of proper service of notice, it is contended that the orders of assessment are liable to be set aside.

Smt.M.M.Jasmine, the learned Government Pleader, on the other hand submitted that notices were issued to the address available with the assessing officer and that sufficient opportunity was granted to the petitioner. Failure to avail the opportunity granted is different from failure to grant an opportunity of hearing, contended the learned Government Pleader. It was also submitted that the failure of the petitioner to appear when an opportunity for hearing was granted cannot be considered as violation of the principles of natural justice.

On an appreciation of the contentions raised, I find that petitioner had submitted Ext.P3 application to the assessing officer on 14.05.2018, intimating “change of correspondence

WP(C) NO. 4238 OF 2022 4 address for all letters/notices for future in respect of VAT/CST”. The said application was received by the officer on 14.05.2018, as seen endorsed on the copy of the application. The said endorsement compells this Court to presume that the change of address was brought to the notice of the assessing officer and the same was available with him. Further, the registration certificate is also seen corrected, subsequent to Ext.P3, to include the present address of the petitioner. However, contrary to the corrected address maintained with the respondent, when the assessment order was issued, it is seen despatched to the earlier address of the petitioner. In the assessment order, however, the officer has observed that when the re-assessment proposal was send through registered post, it has returned with the endorsement “Left”. The soft copy of the notice was also mailed to an e-mail ID, which the officer states to be the official e-mail ID of the dealer. Apparently, from the address shown in the orders of assessment, issued against the petitioner, it is

WP(C) NO. 4238 OF 2022 5 evident that the notice was not been send to the correct address of the petitioner. Similarly, the e-mail address to which the notice is supposed to have been send, is stated by the counsel for the petitioner as the e-mail ID of an earlier employee, who had left the services of the petitioner even before the re- assessment proposal was issued. The veracity or otherwise of the notice through e-mail is not being probed by me at this juncture, having regard to the nature of the order that I propose to pass in the instant case.

Indisputably, the hard copy of the notice issued by registered post to the petitioner was send not to the changed address maintained in the register of the tax authorities, but only to the prior address. After the address particulars of the petitioner was corrected, as is seen from Ext.P2 registration certificate, the assessing officer ought to have issued the notice to the correct address. Since the same has not been done, I am of the view that petitioner is justified in contending that the

WP(C) NO. 4238 OF 2022 6 impugned orders are issued in violation of the principles of natural justice for non service of notice. Accordingly, I find Ext.P4 and P5 liable to be set aside and I do so.

Since the assessment orders relate to the years 2017- 18, it is necessary that the assessing officer be directed to complete the assessments against the petitioner, as expeditiously as possible. Accordingly, while I set aside Ext.P4 and Ext.P5, I direct the assessing officer to grant a fresh opportunity to the petitioner to file their objections to the proposal for re- assessment and pass appropriate orders after granting an opportunity of hearing, within a period of three months from the date of receipt of a copy of this judgement. The assessing officer shall issue a copy of the re-assessment notice dated 13.01.2021 afresh, within a period of two weeks from the date of receipt of a copy of this judgment and the petitioner shall file its objections, if any, within a further period of three weeks from the date of receipt of the said notice and thereafter, the

WP(C) NO. 4238 OF 2022 7 assessing officer shall hear the petitioner on or before 30.03.2022 and appropriate orders shall be passed before the expiry of the outer time limit specified in this judgment. The writ petition is allowed as above. BECHU KURIAN THOMAS JUDGE ssa/

WP(C) NO. 4238 OF 2022 8 APPENDIX OF WP(C) 4238/2022 PETITIONERS’ EXHIBITS Exhibit P1OF THE GST REGISTRATION CERTIFICATE DATED 09.11.2017. Exhibit P2OF THE GST REGISTRATION CERTIFICATE DATED 10.03.2018 EVIDENCING CHANGE IN ADDRESS.

Exhibit P3OF THE COMMUNICATION DATED 14.05.2018. Exhibit P4OF THE ASSESSMENT ORDER UNDER KVAT ACT DATED 29.04.2021. Exhibit P5OF THE ASSESSMENT ORDER UNDER CST ACT. DATED 29.04.2021. Exhibit P6OF THE RECOVERY NOTICE UNDER KVAT ACT DATED 15.02.2021. Exhibit P7OF THE RECOVERY NOTICE UNDER KVAT ACT DATED 15.02.2021.