M/S. Coffee Day Global LTD. vs. The State Tax Officer

Facts

M/s. Coffee Day Global Ltd. (the petitioner) challenged assessment orders for the years 2014-15 and 2015-16, passed under Section 25(1) of the Kerala Value Added Tax Act, before the High Court of Kerala. The petitioner argued that they collected and remitted tax at 5% on roasted coffee beans, while the revenue contended the rate should be 14.5%. The petitioner had previously challenged a penalty order related to this matter, and the proceedings were stayed by the High Court. The petitioner claimed they requested a deferment of the assessment proceedings until the penalty proceedings were resolved, or alternatively, an opportunity to reply on the assessment issue if deferment was not granted. They asserted no such opportunity was provided, violating principles of natural justice.

Held

The Court held that the impugned assessment orders did not suffer from a breach of the principles of natural justice. The Court noted that the assessment orders explicitly stated that pre-assessment notices were duly communicated and acknowledged. Crucially, the orders also recorded that the petitioner's Accounts Head appeared for a personal hearing and tendered a reply, which was meticulously verified by the Assessing Officer. The Court found that the plea raised by the petitioner's authorized representative during the personal hearing was also considered. In light of these recitals, the Court concluded that the petitioner was afforded an opportunity of personal hearing and that their replies and pleas were considered. Therefore, the Court found no violation of natural justice. The petitioner was held to have an alternate and efficacious remedy of preferring statutory appeals against the assessment orders.

Key Issues

1. Whether the assessment orders passed under Section 25(1) of the Kerala Value Added Tax Act for the years 2014-15 and 2015-16 are vitiated by a breach of the principles of natural justice, specifically the right to a proper hearing? Petitioner's Arguments: The petitioner contended that despite their request for deferment of assessment proceedings pending the outcome of a challenge to a penalty order (which was stayed by the Court), or an opportunity to reply on the assessment issue if deferment was denied, no such opportunity was granted. They relied on their communication (Ext.P5) to support this claim. Revenue's Arguments: The State Tax Officer (respondent) refuted the petitioner's claims, relying on the assessment orders themselves (Exts.P1 and P2). The revenue pointed to recitals within these orders indicating that the petitioner was heard prior to the passing of the assessment orders and that their authorized representative attended a personal hearing and submitted a reply.