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2014 Supreme(Online)(KER) 50282
HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, J
M/S ZEUS EXPORTS PVT LTD – Appellant
Versus
STATE OF KERALA – Respondent
WRIT PETITION (CIVIL) 32740/2014
The assessment process must allow taxpayers ample opportunity to provide supporting documentation, particularly for export-oriented firms.
Headnote:
Tax - Assessment Process - No specific act or sections referenced - The court emphasized fair opportunity in tax assessment and the validity of documentary evidence.
Fact of the Case:
Petitioner challenged the hurried finalization of tax assessment by the third respondent, asserting that proper documents evidencing export transactions were not accepted, despite requests for additional time to produce them.
Finding of the Court:
The court found that the petitioner was granted inadequate time to produce necessary export certificates and highlighted the necessity of due process in finalizing tax assessments.
Issues: Whether the assessing authority acted fairly by finalizing the tax assessment without allowing the petitioner sufficient time to submit required documents.
Ratio Decidendi: The court ruled that an opportunity must be given to the petitioner to present clear evidence before finalizing a tax liability, especially given the nature of an export-oriented business.
Final Decision: The court set aside the assessment orders and directed the petitioner to submit documents within one week.
JUDGMENT
Grievance of the petitioner is in respect of the haste shown by the third respondent in finalizing the assessment as per Ext.P1 series orders dated 10.11.2014, whereby huge liability has been mulcted upon the shoulders of the petitioner, in spite of the fact that, no tax is liable to be paid by the petitioner, it being 100%
export oriented firm.
2. The sequence of events shows that, the petitioner was compelled to approach this Court earlier, on a different occasion, in view of the course and proceedings pursued by the assessing authority and pursuant to Ext.P2 judgment dated 13.06.2014 in W.P.(C). No. 14161 of 2014, the second respondent was directed to consider and finalize the appeal preferred by the petitioner. Pursuant to the said judgment, the second respondent passed Ext.P3 order dated 20.08.2014, whereby the assessing authority was directed to reconsider the matter after verifying all the relevant documents to be produced by the petitioner. Pursuant to Ext.P3 order, the assessing authority/third respondent issued Ext.P4 notice to the petitioner asking to produce all the relevant documents.
3. The case of the petitioner is that, the petitioner produced all the relevant documents obtained from the Bank to show the nature of the transaction, but the same was refused to be accepted stating that they were not liable to be accepted for want of seal and signature and the petitioner sought to explain the position stating that, since they were computer generated documents they bear no signature or seal of the Bank. This however was not palatable to the assessing authority, under which circumstance, the petitioner approached the Bank by filing a written submission dated 31.10.2014 to issue a 'Bank Realization Certificate' to prove the exports made by the petitioner during the relevant assessment years and to have it produced before the assessing authority. Enclosing a copy of the letter submitted before the Bank, the petitioner has submitted Ext.P7 request dated 5.11.2013 before the third respondent seeking for one week's time to produce the authenticated documents. The said submission was received by the 3rd respondent as borne by the endorsement made on the same date. Despite the factual sequence as above, the third respondent was more eager to have the assessment finalized, thus passing Ext.P1 series orders on 10.11.2014, which made the petitioner to approach this Court by filing the writ petition.
4. Heard the learned Government Pleader as well, who submits that, no documents were ever produced by the petitioner at any point of time, but for Form 13/13A Certificate/Statement of Accounts for the concerned year. The learned Government Pleader also points out that, the assessing authority cannot be blamed for insisting to produce authenticated copy of the relevant documents.
5. After hearing both the sides, and after going through the materials on record this Court finds that, the petitioner, as per the very opening paragraph of Ext.P7, requested to grant one week's time, with reference to the steps taken by the petitioner by approaching the Bank for issuance of proper Certificate of Exports. It was to substantiate the said fact that a copy of the letter addressed to the Bank was also produced (which has been produced along with the writ petition as well). During the course of hearing, the learned counsel for the petitioner submits that, pursuant to the steps taken by the petitioner, the Bank has already issued necessary Certificates with signature and seal and submits that, only by virtue of the voluminous nature of the same that the petitioner has not chosen to produce the same before this Court. The learned counsel however placed the entire Certificates in different bundles before this Court to prove the bonafides and this Court does not find it necessary to go through the said certificates, which exercise has to be done by the Departmental authorities.
6. After hearing both the sides, this Court finds that an opportuni
