M/S.R.K.Boards And Panels vs. The Assistant Commissioner (St) And 2 Others

Held

The Court held that there was a violation of the principles of natural justice, and the petitioner was not given a proper opportunity to defend itself. The Court noted that the lockdown imposed by the Central and State Governments from March 24, 2020, made it impossible for the petitioner to comply with the short notice. The Court was satisfied that the 1st respondent should not have ignored the petitioner's request for a 15-day extension made via email on March 23, 2020. The Special Counsel for the respondents, on instructions, agreed that the matter should be remitted back to the 1st respondent. Consequently, the Writ Petition was allowed, the impugned ex-parte Audit Assessment Proceedings dated March 30, 2020, were set aside, and the matter was remitted back to the 1st respondent for fresh consideration. The petitioner was granted four weeks from the date of receipt of the order to file objections and documentary evidence. The 1st respondent was directed to pass a reasoned order within three months after providing a personal hearing. The issue of limitation and authorization was not explicitly decided but implicitly addressed by remitting the matter for fresh consideration.

Facts

The petitioner, M/s. R. K. Boards and Panels, a partnership firm dealing in plywood and laminates, is a registered dealer under the Telangana Value Added Tax Act, 2005. The 1st respondent, the Assistant Commissioner (ST), conducted an audit of the petitioner's accounts for the tax period 2013-14 to 2017-18 (up to June 2017). A show-cause notice was issued on March 13, 2020, served on March 17, 2020, requiring objections within 7 days, expiring on March 24, 2020. The petitioner's consultant met the 1st respondent on March 23, 2020, requesting a 15-day extension to file explanations and submit original tax invoices. This request was not granted. Subsequently, an ex-parte Audit Assessment Proceeding dated March 30, 2020, was passed by the 1st respondent, disallowing input tax credit in the absence of tax invoices, without considering the petitioner's adjournment request.

Key Issues

1. Whether the petitioner was denied a sufficient opportunity of being heard by the 1st respondent before passing the ex-parte Audit Assessment Proceedings dated March 30, 2020, particularly in light of the lockdown declared from March 24, 2020, which disabled the petitioner from filing objections? 2. Whether the 1st respondent ought to have ignored the requisition letter dated March 23, 2020, sent by the petitioner's consultant seeking 15 days' time via email, thereby causing grave prejudice to the petitioner? 3. Whether the Audit Assessment Proceedings are barred by limitation for the tax period 2013-14 (April 2013 to February 2014) and whether the 1st respondent had the necessary authorization in Form ADT-VII C for making the impugned Audit Assessment? Petitioner's arguments: The petitioner contended that they were denied a sufficient opportunity to be heard due to the lockdown and the 1st respondent's failure to consider their adjournment request. They argued that the 1st respondent ignored the email seeking time, causing prejudice. Other contentions included bar of limitation and lack of authorization. Respondents' arguments: The Special Counsel for Commercial Taxes did not dispute the lockdown, the short time granted for objections, or the difficulty in producing documentary evidence due to the pandemic and strict lockdown enforcement.