Sri Mallikarjuna Traders vs. Sthe Commercial Tax Officer

Held

The Court held that the impugned assessment order was passed without affording the petitioner an opportunity to file objections and participate in a personal hearing, thereby violating the principles of natural justice. The Court reasoned that due process requires that a party be given a fair chance to present their case before an adverse order is passed. Consequently, the Court found the order unsustainable on these grounds. The Court allowed the writ petition, set aside the impugned order, and remitted the matter back to the first respondent. The first respondent was directed to provide the petitioner with an opportunity to file objections and to conduct a personal hearing before passing a fresh order. The petitioner was directed to submit its objections and provide a postal address for communication within two weeks of receiving the order, and the entire exercise was to be completed within two months.

Facts

The petitioner filed a writ petition challenging an assessment order passed by the first respondent (Commercial Taxes Department) on March 22, 2018. The petitioner contended that the order was passed without proper service of notice and without considering documents submitted, including H-forms, purchase orders, and bills of lading, which were crucial for claiming tax exemption on exports. The petitioner argued that the goods were exempt under the Andhra Pradesh Value Added Tax Act, 2005, and the Central Goods and Services Tax Act, 2017, and that the order violated principles of natural justice. The respondents stated that notices were sent to the petitioner's last known address, but they were returned, and the order was passed within the limitation period due to the petitioner's closure of business in 2016.

Key Issues

1. Whether the assessment order passed by the first respondent is void, illegal, and violative of the principles of natural justice, particularly concerning the lack of proper notice and opportunity for the petitioner to present objections and evidence, as contemplated under the Andhra Pradesh Value Added Tax Act, 2005 and the Central Goods and Services Tax Act, 2017. Petitioner's arguments: The petitioner argued that the assessment order was passed without serving notice and without considering relevant documents like H-forms, purchase orders, and bills of lading, which supported their claim for tax exemption on exports. They asserted that this violated the principles of natural justice and that the goods were indeed exempt from tax. The petitioner relied on the general principles of natural justice and the provisions of the relevant tax statutes. Revenue's arguments: The respondents contended that notices were sent to the petitioner's last known address, but they were returned. They also pointed out that the petitioner had closed its business in 2016 and that the order was passed within the prescribed limitation period.