M/S Khanna Petro Mart vs. State Of Punjab And Others

Held

The Court held that the impugned orders dated 17.5.2021 (Annexures P-13 to P-17) were liable to be set aside. The primary reason for this decision was the admission by the State's counsel that the reply filed by the petitioner had not been considered by the Designated Officer when passing the reassessment orders. This failure to consider the petitioner's reply constituted a violation of the principles of natural justice. Consequently, the Court found it unnecessary to delve into the jurisdictional issue raised by the petitioner concerning Section 29(7) of the Punjab VAT Act, 2005, as the matter was being remanded on procedural grounds. The Court set aside the impugned orders and remanded the matter back to the Designated Officer (respondent no.3) for a fresh decision. The petitioner was directed to appear before the Designated Officer on 24.8.2021, or any other date fixed by the officer, to provide an opportunity for the petitioner to be heard and for a fresh order to be passed in accordance with law.

Facts

The petitioner, M/s Khanna Petro Mart, a partnership firm operating a petrol pump, deals in Motor Spirit (MS) and High Speed Diesel (HSD). These transactions were subject to the Punjab VAT Act, 2005. The petitioner claimed minor losses due to evaporation, within permissible government norms. Their books of accounts for the years 2014-15 to 2018-19 were examined and verified by the Assessing Officer. Following the assessment order for 2018-19, the petitioner applied for a refund of Rs. 6,16,780/- due to excess Input Tax Credit arising from permissible evaporation loss. However, the Excise and Taxation Officer-cum-Designated Officer initiated reassessment proceedings for the years 2014-15 to 2018-19, citing an apparent mistake and failure to produce documents. The petitioner contended this action was without jurisdiction as prior permission from the Commissioner under Section 29(7) of the Punjab VAT Act was not obtained. Despite the petitioner's reply, the Designated Officer passed ex-parte orders revising the assessment under Section 29(8) of the Punjab VAT Act.

Key Issues

1. Whether the reassessment proceedings initiated by the Excise and Taxation Officer-cum-Designated Officer were without jurisdiction, given the alleged failure to obtain prior permission from the Commissioner under Section 29(7) of the Punjab VAT Act, 2005? 2. Whether the impugned ex-parte reassessment orders, passed by the Designated Officer, are liable to be quashed on the grounds of violation of principles of natural justice, specifically for failing to consider the reply filed by the petitioner? Petitioner's arguments: The petitioner argued that the reassessment proceedings were initiated without the requisite prior permission from the Commissioner, rendering them without jurisdiction. They also contended that the impugned orders violated the principles of natural justice because their reply was not considered, and it was wrongly stated in the orders that no reply was filed. The petitioner relied on Section 29(7) of the Punjab VAT Act, 2005. Revenue's arguments: The learned Additional Advocate General for the State of Punjab admitted that the reply filed by the petitioner had not been taken into consideration while passing the impugned orders.