M/S Advance Paints Private Limited vs. The Deputy Commissioner (CT)

Held

The High Court allowed the Writ Petition, setting aside the impugned Revision Order dated 25.10.2022. The Court reasoned that while the revenue contended that the petitioner was not entitled to indulgence due to lapse in furnishing a new address, it also acknowledged the petitioner's submissions regarding winding up of business and change of email ID. Therefore, the Court deemed it appropriate to grant an opportunity to the petitioner to agitate the matter on merits before the 1st respondent. The Court directed that the respondent authorities could issue a fresh show cause notice to the address indicated in the writ petition's cause title. The petitioner would then have an opportunity to provide an explanation, after which the authorities could pass appropriate orders. This relief was made conditional upon the petitioner paying 25% of the amount indicated in the impugned order within four weeks. Failure to comply would allow the respondent authorities to proceed as per law. Any amount already paid would be given credit. The Court expressly left undecided the merits of the case, as the matter was remanded for fresh consideration.

Facts

The petitioner, a private limited company engaged in the paint business, challenged a Revision Order dated 25.10.2022 passed by the Deputy Commissioner (CT), Visakhapatnam Division. This order levied a penalty of Rs. 4,78,896/- under Section 53(1) of the AP VAT Act, 2005, read with Rule 25(8)(a) of AP VAT Rules 2005, and Rs. 1,08,190/- under Section 51(1) of the Act. The impugned order pertained to the tax period from June 2014 to March 2017 and was passed in revision of proceedings dated 29.10.2018 by the Deputy Commercial Tax Officer. The petitioner contended that the revision order violated principles of natural justice and relevant circulars, as they had wound up their Visakhapatnam business and changed their email ID after the GST regime commenced on 01.07.2017, losing the opportunity to respond to show cause notices.

Key Issues

1. Whether the Revision Order dated 25.10.2022 passed by the Deputy Commissioner (CT), Visakhapatnam Division, levying penalties under Section 53(1) and Section 51(1) of the AP VAT Act, 2005, is violative of the principles of natural justice, particularly in light of the petitioner's submission that they had wound up their business in Visakhapatnam and changed their email ID post the GST regime commencement, thereby losing the opportunity to respond to show cause notices. Petitioner's Arguments: The petitioner argued that the impugned order was violative of natural justice and circulars issued by the Commissioner, Commercial Tax. They asserted that due to winding up of business activities at Visakhapatnam and a change in their email ID after July 1, 2017, they missed the opportunity to reply to the show cause notices. Revenue's Arguments: The learned Government Pleader contended that the petitioner was not entitled to indulgence as they failed to furnish their new address. They argued that the impugned order was passed only after making all possible efforts to serve notice and therefore, could not be faulted.