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2021 Supreme(Online)(KER) 32283
HIGH COURT OF KERALA
BECHU KURIAN THOMAS, J
KURIAN ABRAHAM (P) LTD. – Appellant
Versus
THE DEPUTY COMMISSIONER OF STATE TAX – Respondent
WP(C)/10436/2021
SRI.JOSEPH MARKOSE (SR.), SRI.RAMESH CHERIAN JOHN
Natural justice requires that a party be given an opportunity to be heard before an assessment order is made under the KVAT Act.
Headnote:
Opportunity - KVAT Act - Section 25, Section 25(A) - The court emphasized the necessity of providing a hearing opportunity during assessments under the KVAT Act, interpreting the sections to uphold natural justice principles, leading to the quashing of the assessment order.
Fact of the Case:
The petitioner challenged an order issued under Section 25(A) of the KVAT Act, claiming it was issued without a proper hearing despite a notice under Section 25(1) being provided.
Finding of the Court:
The court noted that the order was made without affording an opportunity for the petitioner to be heard and highlighted the importance of adherence to principles of natural justice, especially for assessments with significant tax liability.
Issues: Whether the respondent violated principles of natural justice by failing to provide a hearing prior to issuing the assessment order under the KVAT Act.
Ratio Decidendi: The court established that even where an alternative remedy exists, orders passed without a proper hearing are liable to be quashed, reaffirming the necessity of fair hearing in assessment proceedings.
Final Decision: The writ petition is allowed, and the order is set aside for fresh proceedings with a proper hearing.
JUDGMENT
The petitioner challenges Ext.P5 order passed under Section 25 (A) of the KVAT Act by the respondent. The petitioner has a case that the notice issued, which is produced as Ext.P3, was under Section 25 (1) of the KVAT Act . However, when the order was passed, it is seen to be passed under Section 25 (A) of the KVAT Act .
2. The main grievance pointed out by the learned Senior Counsel, Adv.Joseph Markose duly instructed by Adv.Ramesh Cherian John, is that the order is one passed without giving an opportunity of hearing to the petitioner.
3. I have heard the learned Government Pleader, Adv.Priya Shanavas also. The learned Government Pleader also admits that on a perusal of the order, no such opportunity was given to the petitioner.
4. Even though Ext.P5 is an appealable order, this Court has time and again reminded the authorities that in exercise of jurisdiction, especially, in the matter of assessment of proceedings, an opportunity of hearing is essential as to the edifice on which the case is built up. In the absence of proper hearing, the assessee would obviously be prejudiced.
5. In M S Jewellery v. Assistant Commissioner (Assessment) [1994 KLJ (Tax Cases) 24], this Court has held that even in a case where an alternate remedy exists, if the impugned orders have been passed in undue haste and in violation of the principles of natural justice, the extraordinary jurisdiction under Article 226 can be invoked so as to set right the illegality.
6. I find from Ext.P5 that there has been undue haste in issuing the said order, which, in the circumstances of the case, is not warranted. In a case, where tax liability imposed on the petitioner is large as can be seen from Ext.P5, strict compliance of law is essential. Rule of law demands that a proper opportunity of hearing ought to be given before passing orders of assessment. I place on record the fair submission of the learned Government Pleader, who submitted that the assessment order does not reflect such an opportunity as having been granted.
Accordingly, the writ petition is allowed. Ext.P5 is set aside. The respondent is directed to pass fresh orders after affording a proper opportunity of hearing to the petitioner in accordance with law. The dispute as to whether the order has to be passed under Section 25 (1) of the KVAT Act or under Section 25 (A) of the KVAT Act can also be placed before the respondent by the petitioner.
Sd/-
BECHU KURIAN THOMAS JUDGE
APPENDIX PETITIONER'S/S EXHIBITS:
EXHIBIT P1 TRUE COPY OF THE ORDER OF ASSESSMENT DT 23.10.2020 PASSED BY THE RESPONDENT FOR THE AY 2015-16 EXHIBIT P2 TRUE COPY OF THE NOTICE DT 08.02.2021 ISSUED U/S 25(1) OF THE ACT BY THE RESPONDENT EXHIBIT P3 TRUE COPY OF THE LETTER DT 22.03.2021 FILED BY THE PETITIONER REQUESTING ADDITIONAL TIME TO EXT P2 EXHIBIT P4 TRUE COPY OF THE REPLY DT 25.03.2021 FILED BY THE PETITIONER WITH ANNEXURES MENTIONED THEREIN EXHIBIT P5 TRUE COPY OF THE ORDER OF ASSESSMENT DT 25.03.2021 PASSED BY THE RESPONDENT ALONG WITH NOTICE OF DEMAND FOR THE AY
2015-16 EXHIBIT P6 TRUE COPY OF THE JUDGMENT REPORTED IN
1994 KLJ TAX CASES 24
