C.S.Joshy vs. The State Tax Officer

Facts

The petitioner, C.S. Joshy, proprietor of Tvl. Grace Granite Palace, filed three writ petitions challenging orders dated 28.03.2018 passed by the State Tax Officer. These orders pertained to tax periods 2012-13, 2013-14, and 2014-15. The petitioner contended that his assessments were sought to be reopened, and due to medical reasons, he did not submit his objections. Consequently, the impugned orders were passed without providing him with the details of the mismatch web report, an opportunity to submit a reply, or a personal hearing. The respondent, the State Tax Officer, filed a counter affidavit seeking to sustain the impugned orders.

Held

The Court held that the impugned orders were vitiated on two grounds. Firstly, the respondent's case relied on mismatch details from the departmental website, and the procedure mandated in M/s.JKM Graphics Solutions Private Limited, Chennai vs The Commercial Tax Officer, Vepery Assessment Circle, Chennai, requiring an enquiry with the other end dealer, was not followed. This failure to adhere to the law laid down in the JKM Graphics case rendered the proceedings invalid. Secondly, the Court found that an opportunity of personal hearing was not granted to the petitioner. Citing the Division Bench decision in G.V.Cotton Mills (P) Ltd., V. The Assistant Commissioner(CT), Avarayampalayam Assessment Circle, Coimbatore, the Court held that even if objections were not filed to pre-assessment notices, a personal hearing must be offered. The Supreme Court's observation in Swami Devi Dayal Hospital and Dental College v. Union of India, that hearing is required even in the absence of a specific statutory provision, was also noted. Therefore, despite the petitioner not filing his explanation, a personal hearing ought to have been given. On these twin grounds, the impugned orders were quashed, and the matter was remitted to the respondent for fresh consideration in accordance with law. The Court expressly left undecided any issue concerning the quantum of tax in dispute.

Key Issues

1. Whether the impugned orders, which rely on mismatch details from the departmental website, are vitiated by the failure to conduct an enquiry with the other end dealer, as mandated by the decision in M/s.JKM Graphics Solutions Private Limited, Chennai vs The Commercial Tax Officer, Vepery Assessment Circle, Chennai? (Question of law) 2. Whether the denial of a personal hearing to the petitioner, despite not submitting objections to pre-assessment notices, is contrary to principles of natural justice and the decisions in G.V.Cotton Mills (P) Ltd., V. The Assistant Commissioner(CT), Avarayampalayam Assessment Circle, Coimbatore and Swami Devi Dayal Hospital and Dental College v. Union of India? (Question of law) Petitioner's Arguments: The petitioner argued that the respondent failed to follow the procedure laid down in the JKM Graphics case by not conducting an enquiry with the other dealer. Furthermore, the petitioner contended that a personal hearing was denied, which is a violation of natural justice, citing the G.V. Cotton Mills and Swami Devi Dayal Hospital cases. The petitioner sought quashing of the orders and a direction for a fresh assessment after providing necessary details and an opportunity for hearing. Respondent's Arguments: The respondent, through the Special Government Pleader, argued that the impugned orders should be sustained. However, the judgment does not elaborate on the specific arguments presented by the respondent beyond this general stance.