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2017 Supreme(P&H) 201
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
RAJESH BINDAL & HARINDER SINGH SIDHU, JJ.
M/s Ricela Health Foods Limited – Petitioner
Versus
State of Punjab and Others – Respondents
CWP No. 11769 of 2015 (O&M)
Decided On : 15-02-2017
For the Petitioners: Mr. Sandeep Goyal and Mr. Varun Chadha.
Ms. Radhika Suri with Mr. Dilsher Singh Mann.
The main legal point established in the judgment is the importance of observing the principles of natural justice in assessment proceedings and the need for quasi-judicial authorities to maintain proper records and follow a system that inspires confidence.
Headnote:
Natural Justice - Assessment Orders - Punjab Value Added Tax Act, 2005 - Section 29(2) - Violation of principles of natural justice, no penalty proceedings under the Central Sales Tax Act, despatch of order by e-mail without enabling provision, and mala-fide allegation against the officer concerned - Rule 86(1)(c) of the Punjab Value Added Tax Rules, 2005 - Certified copy of the assessment order along with demand notice to be supplied free of cost to the party - Orders of assessments set aside for violation of principles of natural justice
Fact of the Case:
The petitioner challenged the assessment orders for the years 2009-10 and 2010-11, citing violation of principles of natural justice, absence of penalty proceedings under the Central Sales Tax Act, and mala-fide allegations against the officer. The petitioner also raised concerns about the despatch of the assessment orders by e-mail without an enabling provision.
Finding of the Court:
The court found that the assessment orders were passed in haste without observing the principles of natural justice, and therefore, set aside the orders. The petitioner was directed to appear before the Designated Officer for framing assessments afresh.
Issues: Violation of principles of natural justice, absence of penalty proceedings under the Central Sales Tax Act, despatch of assessment orders by e-mail without enabling provision, and mala-fide allegations against the officer.
Ratio Decidendi: The court held that the assessment orders were passed in haste without observing the principles of natural justice, and therefore, set aside the orders. The court also emphasized the importance of maintaining proper records and following a system that inspires confidence in quasi-judicial proceedings.
Final Decision: The court set aside the assessment orders and directed the petitioner to appear before the Designated Officer for framing assessments afresh.
RAJESH BINDAL, J.
1. This order will dispose of two petitions bearing CWP Nos. 11769 and 12029 of 2015, as common questions of law and facts are involved.
2. In CWP No. 11769 of 2015, challenge has been made to the order of assessment dated 6.5.2015 (Annexure P-17) for the assessment year 2009-10. In CWP No. 12029 of 2015, challenge has been made to the order of assessment dated 6.5.2015 (Annexure P-10) for the assessment year 2010-11.
Arguments in CWP No. 11769 of 2015
3. Learned counsel for the petitioner submitted that notice for the assessment year 2009-10 was issued by the Excise and Taxation Officer, Sangrur to the petitioner under Section 29(2) of the Punjab Value Added Tax Act, 2005 (for short "the VAT Act") for 9.3.2015. On 10.3.2015, the order was reserved, however, the petitioner was granted opportunity to give written submissions till 16.3.2015. The petitioner submitted written reply on 16.3.2015. On 20.3.2015, notice was issued to show cause as to why penal action be not taken under Section 56 of the VAT Act, which was issued for 26.3.2015. The notice was issued only under the VAT Act. No proceedings had taken place on 26.3.2015. As the assessment order had not been passed, the petitioner submitted his objections on 1.4.2015 and on the same day, vide separate letter filed reply to the penalty notice as well. There is no order sheet prepared for penalty proceedings. The petitioner had earlier filed CWP No. 9038 of 2015 on 5.5.2015 challenging the show cause notice. The petitioner was served with copy of the assessment order dated 5.5.2015 through e-mail on 6.5.2015. The order was not signed. Along with the assessment order, demand notice dated 6.5.2015 was received, which was also unsigned. He referred to the information (Annexure P-18) given regarding attendance of the Designated Officer in office, who framed the assessment. He was on leave from 11.00 AM to 5.00 PM on 6.5.2015. The order sheet prepared by him on that day states that the order is released today. The same be sent to the petitioner through e-mail along with demand notice. He further submitted that in any case, the transactions, on which the tax has been sought to be levied, were reported at the Information Collection Centres and the payments against these were received through banking channel.
4. Challenge to the order of assessment has been made by the petitioner on the ground of violation of the principles of natural justice, no penalty proceedings having been initiated under the Central Sales Tax Act, 1956 (for short "the Central Act"), despatch of order by e-mail without there being any enabling provision and allegation of mala-fide has also been levelled against the officer concerned.
5. Referring to the discrepancies in the stand taken by the State in the official reply and the officer concerned, learned counsel for the petitioner referred to para No. 18 of the official reply, wherein it was stated that the order of assessment was sent to the petitioner via mail at 10.25 AM on 6.5.2015, whereas in para No. 5 of the reply filed by the officer concerned, as he has been impleaded as respondent in person, it is stated that the order was dictated on 5.5.2015 and it was sent through e-mail to the petitioner from Patiala, where he was on official duty on that day. He further submitted that no penalty could be levied for the reason that order was reserved on 10.3.2015 only with reference to the assessment and not for levy of penalty, for which separate proceedings were initiated, which were not concluded. If order had been dictated on 5.5.2015, why it was not despatched by him on the same day when he was present in office, but sent on 6.5.2015 when admittedly he was not in office. In fact, the Designated Officer went to Sangrur on 6.5.2015. As claimed by him, he attended office till 11.00 AM. On that day, at 10.25 AM, he merely sent a word format copy to the petitioner through e-mail and not PDF file signed by him or digitally signed copy. While re
