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IN THE HIGH COURT OF GAUHATI
Soumitra Saikia, J.
M/s New Tech Steel And Alloys Pvt. Ltd. - Appellant
Versus
State Of Assam And Ors - Respondent
W.P. (C) No. 3333 of 2017
Decided On : 26-02-2021
Natural Justice - Assessment Orders - AVAT Act 2003, Central Sales Tax Act 1956 - Summary
Fact of the Case:
The petitioner-company challenged assessment orders and demand notices issued by the respondent Department for the assessment year 2010-11. The petitioner contended that the Department proceeded with the assessment without granting adequate opportunity to submit necessary documents, namely, the Eligibility Certificate and the Certificate of Entitlement, and that the impugned orders were passed without proper notice and in violation of the Principles of Natural Justice.
Finding of the Court:
The Court found that the petitioner failed to demonstrate prejudice caused by the non-issuance of notice under section 37 of the AVAT Act 2003, and that the impugned orders were not illegal solely on the ground of violating the Principles of Natural Justice. The Court also noted that the petitioner had alternative statutory remedies available under the AVAT Act 2003.
Issues: The primary issue was the alleged violation of the Principles of Natural Justice due to non-issuance of proper notice by the Department prior to completion of assessment orders.
Ratio Decidendi: The Court held that the violation of the Principles of Natural Justice does not ipso-facto lead to the invalidity of the orders passed, and that the validity of the order has to be decided on the touchstone of 'prejudice' caused to the complainant. The Court also emphasized that the breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
Final Decision: The Court remanded the matter back to the department to address the grievances of the petitioner and pass appropriate orders within a specified period, and continued the interim order directing no coercive action to be taken until such orders are passed.
JUDGMENT
Soumitra Saikia, J. - Wp(C)/3056/2017 has been filed by the petitioner-company assailing the assessment order dated 20-07-2013 passed by the respondent no. 3 assessing that the petitioner to be liable to pay the taxes assessed and interest of Rs. 10,01,015/- (Rupees Ten Lakhs One Thousand Fifteen) only as Tax due, interest payable Rs. 4,43,719/- (Rupees Four Lakhs Forty Three Thousand Seven Hundred Nineteen), penalty of Rs. 5,00,000/- (Rupees Five Lakh) only under section 90 and Rs. 1,00,000/- (Rupees One Lakh) and only under section 62(3) of the AVAT Act 2003 for the assessment year 2010-11 and the Demand Notice dated 30.07.2013 issued seeking to recover the amounts assessed.
WP(C)/3333/2017 has also been filed by the petitioner-company assailing the assessment order dated 20-07-2013 passed by the respondent no. 3 under section 9(2) of the Central Sales Tax Act, 1956 read with section 37 of the Assam Value Added Tax Act, 2003 in respect of quarterly turn over/return filed by the petitioner showing an amount of Rs. 3,52,41,153/- (Rupees Three Crore Fifty Two Lakhs Forty One Thousand One Hundred Fifty Three only) whereby an amount of Rs. 6,31,016/- (Rupees Six Lahks Thirty One Thousand Sixteen only) was assessed as tax due and interest payable. The demand Notice dated 30-07-2013 raising a demand of Rs. Rs. 6,31,016/- (Rupees Six Lahks Thirty One Thousand Sixteen only) pursuant to the said assessment order passed by the respondent no. 3 has also been assailed by the petitioner.
Since both the writ petitions were filed by the same petitioner being aggrieved by the same respondent authority namely, respondent no. 3 and since the grounds of challenge in both the writ petitions are common namely, violation of Principles of Natural Justice because of non-issuance of proper Notice by the respondent Department prior to completion of assessments order, both the writ petitions were taken up for hearing together and are disposed of by a common order.
2. By notification dated 12-05-2009 the Government of Assam announced the Industrial and Investment Policy of Assam, 2008 (hereinafter referred to as the Policy of 2008) granting exemption from payment of sales tax to New Industrial Units set up on or after 01.10.2008 and also existing industrial units undertaking expansion, modernization and diversification. The exemption was granted for a period of 7(seven) years. The period of validity of the said Policy was for a period of 5(five) years w.e.f. 01.10.2008 to 30.09.2013. In order to give effect to the Policy of 2008, a Scheme, namely, the Assam Industries (Tax Remission) Scheme, 2009 (hereinafter referred to as the Scheme of 2009) was published vide Notification No. FTX.66/2009/2 dated 03.11.2009.
3. Being bolstered by the exemptions announced in the Industrial Policy of Assam, 2008 by the Government of Assam, the petitioner-company established its factory at N.H.39, near CRPF Group Centre, Khatkhati, Assam in the district of Karbi Anglong for manufacturing of MS Ingots and TMT Bars.
4. The petitioner-company being a new unit with State of Assam, applied for and was granted an Eligibility Certificate as well as a Certificate of Entitlement for claiming incentives and exemptions under the Policy of 2008 and the Scheme of 2009 respectively. The Eligibility Certificate and the Certificate of Entitlement was granted to the petitioner on 26.08.2013 and 25.10.2013 respectively.
5. For the assessment year 2010-11, the petitioner submitted its annual returns. It is contended that the returns filed were duly accompanied by the audited balance sheet for the assessment year 2010-11. It is contended that the petitioner's case was selected for Audit Assessments by the Department. Pursuant to the Notice received from the Department, the petitioner informed the Department that it was granted the Eligibility Certificate and the Certificate of Entitlement under the Policy of 2008 and the Scheme of 2009 respectively. However, since the same was not handed
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