M/S.Rampur Pipe Company vs. The Commercial Tax Officer (Audit) And 2 Others

Held

The Court held that there was a patent violation of the principles of natural justice. It reasoned that the first respondent (Commercial Tax Officer) could not have passed the assessment order on March 30, 2020, without the show-cause notice having been served on the petitioner. The Court noted that the respondent did not dispute the petitioner's claim regarding the dates of service of the show-cause notice and the passing of the assessment order. Consequently, the impugned assessment order was set aside. The matter was remitted back to the first respondent for fresh consideration. The petitioner was granted four weeks from the date of receiving the order to file their explanation to the show-cause notice along with supporting material. The first respondent was directed to afford a personal hearing to the petitioner and pass a reasoned order within eight weeks of receiving the petitioner's explanation.

Facts

The petitioner, M/s. Rampur Pipe Company, a dealer under the Telangana Value Added Tax Act, 2005, was issued a notice by the Commercial Tax Officer (Audit) on February 12, 2020, for the tax period April 2013 to March 2014. The petitioner requested an extension to produce documents. Subsequently, on March 11, 2020, a show-cause notice was issued, requiring a reply within seven days. The petitioner replied on May 13, 2020, requesting 30 days' time due to the COVID-19 lockdown. However, on March 30, 2020, the Commercial Tax Officer passed an ex-parte audit assessment order, stating no reply was received. This order, which determined under-declared tax of Rs. 3,89,542/-, was received by the petitioner on May 20, 2020. The petitioner challenged this order, alleging violation of natural justice and that the assessment order was passed before the show-cause notice was served.

Key Issues

1. Whether the ex-parte audit assessment proceedings dated March 30, 2020, passed by the Commercial Tax Officer (Audit) for the tax period April 2013 to March 2014, are liable to be set aside for being in violation of the principles of natural justice, specifically concerning the service of the show-cause notice and the opportunity to be heard, as contended by the petitioner under the Telangana Value Added Tax Act, 2005? Petitioner's Contentions: The petitioner argued that the assessment order was passed in violation of the principles of natural justice. They contended that the show-cause notice dated March 11, 2020, was received on May 12, 2020, as evidenced by the postal cover (Ex.P2). Crucially, the assessment order dated March 30, 2020, was passed prior to the petitioner receiving the show-cause notice, despite the order being communicated later on May 20, 2020. The petitioner also argued that the assessment was barred by limitation for the period April 2013 to February 2014. Respondents' Contentions: The Special Counsel for Commercial Taxes did not dispute that the show-cause notice reached the petitioner on May 12, 2020, and that the impugned assessment order had already been passed on March 30, 2020.