M/S Decathlon Sports INDIA PVT.LTD. vs. The Assistant Commissioner

Held

The Court held that while a hearing was conducted on 10-07-2019, a further hearing was not afforded after the appellant filed a reply on 25-07-2019. However, the Court did not conclude that this constituted a violation of natural justice, leaving it open for consideration by the Appellate Authority. The Court found no illegality or impropriety in the Single Judge's conclusion that the dispute regarding natural justice alone was not a ground to bypass the statutory remedy of appeal. The Court noted that the assessment order predated the interim stay order, thus there was no violation of the stay. Regarding the connection with penalty proceedings, the Court directed that if the appellant requests the Appellate Authority to defer consideration of the appeal until the penalty proceedings are finalized, such request shall be considered by the Appellate Authority based on the observations in this judgment. The stay on recovery steps was extended for one month from the date of the judgment.

Facts

The appellant, M/s Decathlon Sports India Pvt. Ltd., challenged an assessment order (Exhibit P6) for the year 2016-2017 before the Kerala High Court. The appellant contended that the assessment order was passed without affording a personal hearing and in violation of an interim stay order in a connected writ petition (WP(C) No. 12596/2019) which restrained further proceedings based on a pre-assessment notice. The Single Judge dismissed the writ petition, finding no jurisdictional error or violation of natural justice as the assessment order predated the interim stay, and directed the appellant to pursue the statutory appeal remedy. The Single Judge also granted a one-month stay on recovery steps to facilitate the filing of the appeal.

Key Issues

1. Whether the assessment order dated 27-07-2019 (Exhibit P6) was passed in violation of the principles of natural justice, specifically by not affording a personal hearing after the appellant submitted a revised reply on 25-07-2019, thereby rendering the Single Judge's finding of no jurisdictional error erroneous? - Petitioner's argument: The Single Judge erred in concluding there was no violation of natural justice, as a personal hearing was not provided after the appellant submitted a reply on 25-07-2019, despite a revised pre-assessment notice being issued earlier. The assessment order was passed without adequate opportunity for further hearing. - Revenue's argument: Not recorded. 2. Whether the assessment order was passed in violation of the interim stay order dated 06-08-2019 in WP(C) No. 12596/2019, which restrained further proceedings based on the pre-assessment notice? - Petitioner's argument: The assessment order was finalized in violation of the interim stay. (This contention was addressed by the Single Judge finding the assessment order predated the stay). - Revenue's argument: Not recorded. 3. Whether the assessment proceedings are intrinsically connected with penalty proceedings that have been struck down by this Court, and if so, whether the Appellate Authority should be directed to keep the appeal in abeyance until the penalty proceedings are decided afresh?