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2020 Supreme(AP) 672
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
C. Praveen Kumar, D. Ramesh, JJ.
Anjana Pharma – Appellant
Versus
The Commercial Tax Officer and Ors. – Respondents
Writ Petition No. 20973 of 2019
Decided On : 14-12-2020
Advocate Appeared:
For the Appellant :M.V.J.K. Kumar, Advocate
The service of assessment order on an unauthorized person is invalid and improper, and the best judgment assessment order passed without giving the dealer a reasonable opportunity of being heard is also invalid.
Headnote:
APVAT - BEST JUDGMENT ASSESSMENT - SERVICE OF NOTICE - VALIDITY - NOMINATION OF AUTHORIZED PERSON - RULE 63 OF APVAT RULES, 2005 - INTERPRETATION - SERVICE OF ASSESSMENT ORDER ON UNAUTHORIZED PERSON - INVALIDITY - G. SRINIVASA RAJU'S CASE (APSTJ 81 (2014) PAGE 59) - RATIO - APPLICATION.
Fact of the Case:
Petitioner, a drug and medicine business owner, challenged the best judgment assessment order passed by the Commercial Tax Officer (CTO) without conducting an audit or issuing show cause notices. The petitioner argued that the service of assessment order on an unauthorized person was invalid and violated the principles of natural justice.
Finding of the Court:
The court found that the CTO did not follow the procedure contemplated under the APVAT Act and Rules, 2005. The court held that the service of assessment order on an unauthorized person was not valid and proper, relying on the ratio laid down in G. Srinivasa Raju's case.
Issues: 1. Whether the service of assessment order on an unauthorized person was valid and proper? 2. Whether the best judgment assessment order passed without conducting an audit or issuing show cause notices was valid?
Ratio Decidendi: 1. Rule 63 of APVAT Rules, 2005 mandates every VAT dealer to nominate an authorized person to receive notices and orders on their behalf. In the absence of such nomination, the Commissioner or authorized officer shall nominate a person for this purpose. 2. The service of assessment order on a person who is not authorized to represent the assessee is not a valid and proper service. 3. The best judgment assessment order passed without giving the dealer a reasonable opportunity of being heard, as required under Section 53 of the APVAT Act, is invalid.
Final Decision: The court set aside the impugned best judgment assessment order and the appeal order, and remanded the matter back to the original authority. The original authority was directed to treat the order passed on 31.05.2016 as a show cause notice and consider the petitioner's explanation along with books and records. The petitioner was directed to submit the explanation within two weeks from the date of receipt of the order.
ORDER :
D. Ramesh, J.
1. This Writ Petition is filed under Article 226 of the Constitution of India, seeking the following relief:
"to issue an appropriate Writ, order or direction particularly in the nature of Writ of Mandamus declaring the action of the Commercial Tax Officer, Narsapur Circle in passing the assessment order dated 31.05.2016 in A.O. No. 23406 on best judgment assessment basis without there being any iota of evidence and without conducting the audit and verifying the books of account and without issuing the show cause notices and without verifying whether the assessment order can be served on a person other than the petitioner in the absence of there being any authorization, which was approved by the Appellate Deputy Commissioner CT, Vijayawada as illegal, arbitrary, improper, unfair, without authority of law and jurisdiction, contrary to the provisions of the APVAT Act and Rules 2005 and contrary to the doctrine of principles of natural justice and violative of articles 14, 19(1) (g) and 265 of the Constitution of India and consequently to set aside the same..."
2. As per the averments of the Writ Petition, the petitioner is carrying on business in drugs and medicines, established its shop as per the requirements of Shops and Establishments Act and is an assessee on the rolls of the Commercial Tax Officer, Narsapur Circle.
3. On authorization of the Deputy Commissioner, a Form 304 notice was issued to the petitioner and at the time of audit, the petitioner was not available in business premises. It was alleged that three notices have been issued to the petitioner for production of books of account and for conduct of audit. The petitioner contended that the audit is supposed to take place in the business premises of the petitioner, but unfortunately it is beyond anybody's imagination that how the books of account can be submitted by the petitioner for the purpose of audit and the same is quite contrary to the audit principles of department. At any rate, the petitioner has denied the alleged notices issued by the respondent authorities on 27.01.2016, 22.02.2016, 22.03.2016. But without following the procedure contemplated as per the Act, by treating the same as deemed service, assessment order has been passed. Thus, the best judgment assessment order dated 31.05.2016 in TIN 37313091803 seems to have been passed and the same has been served through Registered Post and which is alleged to have been received by a person named N. Vijaya Lakshmi, who has put the seal of the firm, but has not intimated about the order that she has received, to the petitioner concern. Subsequently, she left the job because of her personal problems. As there was demand from the first respondent, the petitioner applied for a certified copy, which was duly supplied to the petitioner, pursuant to which the petitioner has filed an appeal on 28.05.2019 intimating the appellate authority that as he has not received any order, he himself applied for certified copy, upon receipt of the same, he filed the appeal. The same was rejected by the appellate authority, by its order dated 19.07.2019 with the following reasons-
"In view of the above, since the appellant failed to prefer an appeal on the original assessment order dated 31.05.2016, which was duly served on 25.07.2016, as confirmed by the AA, such original assessment order has became final and the present appeal filed by the appellant dated 28.05.2019 with delay of 2 years 9 months 4 days, hence, cannot be admitted. Further the appellants have not submitted any valid reasons sufficient cause for not preferring the appeal within the prescribed time of 30 days and condonable time of 30 days of receipt of the original assessment order. Hence, the appeal petition is hereby rejected at admission stage as per the provisions of the Act".
4. Questioning the best judgment assessment order, dated 31.05.2016 and also appeal order in A.O.-ADC 4301, dated 19.07.2019, the present Writ Petition is filed.
5. Hea
