M/S. Vamsi Art Printers Private Limited vs. Commercial Tax Officer

Held

The Court held that granting only seven days to an assessee to submit a reply to a revised show cause notice, issued six years after the original assessment, was too short and amounted to depriving the petitioner of an effective opportunity to reply. The Court found that the revised show cause notice dated September 16, 2019, was served on the petitioner on September 18, 2019, and the impugned revision order was passed on September 26, 2019. This short period violated the principles of natural justice. Consequently, the Court set aside the impugned order dated September 26, 2019. The petitioner was permitted to file a reply to the revised show cause notice within three weeks from the date of receiving a copy of the order. Upon receipt of the petitioner's objections, the 3rd respondent was directed to pass a fresh order in accordance with law and communicate it to the petitioner.

Facts

The petitioner, a printing press company and assessee under the Telangana Value Added Tax Act, 2005, had an assessment order for April 2008 to March 2013, with a tax liability of Rs. 65,299/-, which was paid. The 3rd respondent issued a revised show cause notice on September 16, 2019, proposing to revise the assessment and disallow input tax credit of Rs. 5,57,546/-. This notice was served on September 18, 2019, giving the petitioner only seven days to file objections. The petitioner received the revised show cause notice and the impugned revision order dated September 26, 2019, within a short period. The petitioner contended that the time granted was insufficient, violating principles of natural justice, and that the revision order was passed hastily.

Key Issues

1. Whether the time granted to the petitioner to file objections to the revised show cause notice was reasonable and in compliance with the principles of natural justice, considering the notice was issued under Section 32(2) of the Telangana Value Added Tax Act, 2005? Petitioner's arguments: The petitioner argued that the seven-day period provided to file objections to the revised show cause notice was arbitrary and illegal, violating principles of natural justice. They contended that preparing a reply required legal advice and sufficient time. The petitioner also raised contentions on merits disputing the revised show cause notice. They further argued that the revision order was passed in haste on the last day of the limitation period, causing prejudice. Revenue's arguments: The revenue contended that reasonable time was afforded to the petitioner to submit a reply to the revisional show cause notice, and since no reply was filed within that time, the 3rd respondent was justified in passing the impugned revisional order.