Evm Motors vs. The Assistant Commissioner (I)

Held

The High Court held that the Assistant Commissioner's order rejecting the rectification application was illegal and suffered from a lack of proper reasoning. The Court noted that the Assistant Commissioner acknowledged a mistake in the application itself (use of 'Crores' instead of 'Lakhs') but failed to advert to the specific mistake pointed out by the appellant or consider the documents submitted in support. The Court emphasized that exercising statutory power under Section 66 of the KVAT Act requires proper reasoning and adherence to principles of natural justice, including affording an opportunity of personal hearing. Since these requisites were lacking, the impugned order was quashed. The Court directed the Assistant Commissioner to re-consider the rectification application, pass a speaking order with proper reasoning, and afford the appellant an opportunity of personal hearing. The judgment of the Single Judge was set aside, and the writ petition was allowed. The operative direction was to re-consider the application within three weeks, with a specific date for personal hearing provided.

Facts

The appellant, M/s EVM Motors, filed a writ petition challenging an order (Exhibit P5) passed by the Assistant Commissioner (SGST Department). The appellant had sought rectification of a mistake in their assessment under Section 66 of the Kerala Value Added Tax (KVAT) Act. They claimed a typographical error in their application (Exhibit P4) where 'Rs.22.84 crs.' was mistakenly entered instead of 'Rs.22.84 lakhs'. This error, they contended, led to an incorrect assessment of interstate purchases. The Assistant Commissioner rejected the rectification application, stating that verification of assessment records showed a difference of Rs.8,80,47,700/- between conceded interstate purchases and check post data, and thus the dealer's allegation was incorrect. The Single Judge dismissed the writ petition, finding no reason to interfere with the Assistant Commissioner's order, noting that the application itself contained mistakes and the authority found no grounds for rectification.

Key Issues

1. Whether the Assistant Commissioner erred in rejecting the appellant's application for rectification of mistake under Section 66 of the KVAT Act without proper consideration of the submitted documents and without affording an opportunity of personal hearing, thereby violating principles of natural justice? The appellant argued that the Assistant Commissioner failed to properly consider their grievance and the supporting documents, and that the rejection order was cryptic and lacked reasoning. They contended that the mistake in the application was a typographical error, and the intended figure was significantly different, impacting the assessment. They relied on the statutory power vested under Section 66 of the KVAT Act, which mandates proper exercise of such power with adherence to natural justice principles. The respondents (Assistant Commissioners) argued, as reflected in the impugned order, that upon verification of assessment records, the figures were found to be correct, and the dealer's allegation of a mistake was not substantiated. The judgment does not explicitly record arguments from the respondents beyond what is stated in the impugned order.