M/S.Kaveri Ginning Mills (PVT) LTD. vs. The Assistant Commissioner Of Commercial Taxes (CT)

Held

The Court held that the impugned reassessment order was not sustainable in law. Regarding the first issue, while not explicitly stated that respondent No.1 lacked jurisdiction, the counsel for the revenue did not dispute the petitioner's assertion that only the Deputy Commissioner is competent to pass a revised order in appropriate cases. This implicitly suggests a jurisdictional issue or at least a procedural irregularity. Concerning the second issue, the Court found that the impugned order was indeed bereft of reasons. It noted that respondent No.1 had merely rejected the petitioner's detailed replies with a cryptic observation that the averments were "found untenable" without discussing the contents of the replies or providing any justification for this conclusion. Citing the principle that reasons are the heart and soul of any order affecting a party's rights, the Court held that the absence of reasons vitiates the order. Consequently, the impugned order was set aside. Respondent No.1 was permitted to pass a fresh order after considering the petitioner's objections.

Facts

The petitioner, M/s. Kaveri Ginning Mills (Pvt.) Ltd., engaged in the business of cotton and its products, filed a writ petition challenging a Reassessment Order dated 31-10-2017, passed by the Assistant Commissioner of Commercial Taxes (respondent No.1). The order pertains to the assessment years 2012-2013 to 2014-2015. Initially, respondent No.1 demanded additional tax and penalty. Subsequently, a revised show cause notice proposed to levy a tax of Rs.1,02,260/- and disallow input tax credit, leading to a proposed levy of Rs.6,21,775/-. The petitioner submitted a reply disputing the proposed liability. The impugned order confirmed a liability of Rs.5,19,515/-.

Key Issues

1. Whether respondent No.1 had the jurisdiction to pass the revised assessment order, as contemplated under the relevant provisions of the GST/VAT Act, and if not, does this vitiate the order? 2. Whether the impugned reassessment order suffers from a lack of reasons, thereby violating the principles of natural justice? Petitioner's arguments: The petitioner contended that respondent No.1 lacked the jurisdiction to pass the revised assessment order. Furthermore, the petitioner argued that the order was passed without providing any reasons, which violates the principles of natural justice. Revenue's arguments: The learned Special Standing Counsel for Commercial Taxes did not dispute the petitioner's contention regarding the jurisdiction of respondent No.1 to pass a revised order in appropriate cases, acknowledging that such power typically vests with the Deputy Commissioner. The counsel also did not dispute that the impugned order was bereft of reasons.