Classic Pharma vs. Assistant Commissioner (St)(Int)

Held

The Court held that there was merit in the petitioner's submission that the show-cause notice, issued during the period of the Covid-19 pandemic, may not have been effectively received by the petitioner. The Court acknowledged that during this period, business premises were often closed, and the petitioner might not have been aware of the notice's issuance, thus preventing them from providing an effective reply. Citing a precedent in W.P. No. 5114 of 2023, where a similar situation led to the setting aside of the assessment order, the Court found it appropriate to do the same in the present case in the interest of justice. The impugned assessment order was set aside. The Court directed the 1st respondent to issue a fresh show-cause notice to the petitioner within two weeks, provide sufficient time for the petitioner to submit their explanation, conduct an inquiry with an opportunity for a personal hearing, and then pass a fresh assessment order in accordance with the law.

Facts

The petitioner challenged an assessment order dated 28.04.2022, passed by the 1st respondent for the period July 2017 to September 2019. The petitioner contended that they did not receive the show-cause notice dated 11.03.2020 due to the onset of the Covid-19 pandemic, and therefore, had no opportunity to respond. Consequently, the impugned order was passed without the petitioner's input. The petitioner argued that they had valid grounds to present before the authority and sought an opportunity to do so. The impugned order itself noted that a show-cause notice was issued, but no reply was received.

Key Issues

1. Whether the petitioner was deprived of an opportunity to respond to the show-cause notice due to the Covid-19 pandemic, thereby vitiating the assessment order? (Question of mixed law and fact, concerning principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner argued that the Covid-19 pandemic significantly disrupted normal business operations and communication channels, leading to the non-receipt of the show-cause notice. They asserted that they have substantial grounds to present and requested an opportunity for a hearing. They relied on a previous order of the High Court in W.P. No. 5114 of 2023, which allowed a similar petition under analogous circumstances. Revenue's arguments: The learned Government Pleader for Commercial Tax opposed the writ petition.