M/S.Silvex Exports Private Limited vs. The State Tax Officer (GST) And Another

Held

The Court held that the non-consideration of the petitioner's objections filed on March 30, 2019, and January 23, 2020, along with the material filed by the petitioner before the 1st respondent, vitiates the impugned assessment order. The Court also held that the 1st respondent ought to have provided a personal hearing to the petitioner and considered the plea of the bar of limitation for the assessment period up to February 2016, as raised by the petitioner. The ratio decidendi is that an assessment order passed without affording a proper opportunity of hearing and without considering the objections and material filed by the assessee is unsustainable in law and violates principles of natural justice. The impugned Assessment Order No.34322 dated March 23, 2020, was set aside, and the matter was remanded to the 1st respondent. The petitioner was granted the liberty to raise all contentions, including the non-consideration of objections and the plea of limitation. The 1st respondent was directed to afford a personal hearing, consider all objections and material, and pass a reasoned order.

Facts

The petitioner, M/s. Silvex Exports Private Limited, challenged an assessment order dated March 23, 2020, passed by the 1st respondent (State Tax Officer) for the tax period 2015-16 under the Central Sales Tax Act, 1956. The petitioner contended that the assessment order was passed ex-parte without sufficient opportunity of being heard, and without considering their objections filed on March 30, 2019, and January 23, 2020. They also argued that the assessment was barred by limitation. The petitioner had previously submitted turnover details and C/F forms. A show-cause notice was issued proposing to assess a turnover of Rs. 1,52,56,065/-. The petitioner later filed a reply with original F-Forms for a turnover of Rs. 4,53,185/-. An arrear notice dated September 11, 2020, demanded CST assessment tax of Rs. 8,15,729/-.

Key Issues

1. Whether the assessment order dated March 23, 2020, passed by the 1st respondent for the tax period 2015-16 under the Central Sales Tax Act, 1956, is vitiated by non-consideration of the petitioner's objections filed on March 30, 2019, and January 23, 2020, and by denial of a personal hearing, thereby violating principles of natural justice? 2. Whether the assessment proceedings for the tax period April 2015 to February 2016 are barred by limitation as prescribed under Sub-Rule 5(a) of Rule 14A of the CST (Telangana) Rules, 1957? Petitioner's arguments: The assessment order was passed without considering their objections and without providing a personal hearing, making it arbitrary and contrary to law. The assessment is also barred by limitation. They relied on the fact that they had filed C-Forms and F-Forms with relevant turnovers, which were not considered. Revenue's arguments: The learned Special Counsel for Commercial Taxes stated that the 1st respondent would reconsider all contentions and material if the matter was remanded. The counsel did not dispute that the petitioner's objections were not considered.