Anand Sweets & Savouries V. The Assistant Commissioner of Commercial Taxes(Enforcement)-14 South Zone and The Deputy Commissioner of Commercial Taxes(Audit-1.7) and The Commissioner of Commercial Taxes in Karnataka

WP/882/2015

AI Insights

The case involves M/s Anand Sweets & Savouries, represented by its partner Sri Aravind Dadu, who filed writ petitions against the order of re-assessment and the subsequent demand notice issued by the Deputy Commissioner of Commercial Taxes. The petitioner challenged the order on the grounds that it was passed without a fair and reasonable opportunity of hearing, violating the principles of natural justice. The court found that the Deputy Commissioner had not adequately considered the petitioner's request for more time to present his case, leading to a decision in favor of the petitioner.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 799255 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-01-2015
• Assessment Year: misc
• Laws Referred To: Karnataka Value Added Tax 2003
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S V KUMAR
• Assessee Lawyers: R V PRASAD
• Keywords: Additional tax; Fair hearing; Natural Justice; Re-assessment
• Section: 39(1)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JANUARY, 2015 BEFORE THE HON'BLE MR.JUSTICE B.S. PATIL W.P.Nos.882 to 893/2015(T-RES) BETWEEN: M/S ANAND SWEETS & SAVOURIES, REPRESENTED BY ITS PARTNER, SRI ARAVIND DADU, AGED ABOUT 34 YEARS, NO.8, COMMERCIAL STREET BANGALORE 560 001. … PETITIONER (By Shri.R.V. PRASAD-ADV.) AND: 1. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES(ENFORCEMENT)-14 SOUTH ZONE, VTK-II KORAMANGALA, BANGALORE 560 047. 2. THE DEPUTY COMMISSIONER OF COMMERCOAL TAXEX(AUDIT-1.7) D.V.O.-1, 5THE FLOOR, BMTC BUS STOP, TTMC BUILDING BANGALORE 560 022 3. THE COMMISSIONER OF COMMERCOAL TAXES IN KARNATAKA, 2 VANIJYA THERIGE KARYALAYA 1ST MAIN, GANDHINAGAR, BANGALORE 560 009. …RESPONDENTS (By Shri. S.V. GIRI KUMAR-AGA ) *** THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER OF RE-ASSESSMENT DATED 9.12.2014 PASSED BY THE SAID RESPONDENT U/S 39(1) OF THE ACT. IN THE CASE OF THE PETITIONER FOR ASSESSMENT PERIOD FROM APRIL, 2010 AND UPTO MARCH 2011 AND THE CONSEQUENTIAL NOTICE OF DEMAND, ALSO DATED 9.12.2014 ISSUED IN VAT FORM-180 VIDE ANNEXURE-G & H. THESE PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:- O R D E R Addl. Government Advocate is directed to take notice to Respondent Nos.1 to 3. 2. With the consent of learned counsel for both sides, the matter is taken up for final disposal. 3. In this writ petition, petitioner is calling in question the order dated 9.12.2014 passed by the Deputy 3 Commissioner of Commercial Taxes- respondent No.2 herein under section 39(1) of the Karnataka Value Added Tax 2003, (“Act” for short). 4. The main contention urged by the counsel for the petitioner is that impugned order has been passed without providing fair and reasonable opportunity of hearing to the petitioner while recording a finding regarding the total additional tax payable which is far in excess of what was notified to the petitioner in the proposition notice dated 3.12.2012 vide Annexure-C. 5. It is in this back ground, the learned counsel Sri. R.V. Prasad submits that petitioner may not be relegated to the alternative remedy of filing an appeal having regard to violation of principles of natural justice. He further points out that though, pursuant to the proposition notice issued on 3.12.2012, petitioner had submitted his objections on 10.12.2012 vide Annexure-D, the 2nd respondent did not choose to continue the proceedings for nearly two years. He issued an endorsement dated 28.10.2014 to the petitioner 4 herein purporting to provide an opportunity to him and calling upon him to be present on 5.11.2014 vide Annexure- E. In response to this endorsement, petitioner has written a letter dated 3.11.2014 vide Annexure-F, requesting to provide time till 10.12.2014 enabling him to appear before the authority. This letter is produced at Annexure-F. However, without providing any opportunity, the 2nd respondent has proceeded to pass the impugned order holding that total amount of additional tax payable by the petitioner is Rs.3,20,06,874/-. Pursuant whereof notice of demand has been issued vide Annexure-H dated 9.12.2014. 6. On consideration of all the materials on record and upon hearing the learned counsel for the petitioner and the learned Additional Government Advocate, it emerges that having issued the proposition notice, the 2nd respondent had kept quite for a period of 2 years. Thereafter the 2nd respondent issued an endorsement calling upon the petitioner to appear on 5.11.2014. The petitioner has requested for more time contending that he intended to provide further details and that up to 10th December they 5 were pre-occupied with festival season and were engaged in filing income tax returns. The 2nd respondent ought to have considered the said request and provided a fair and reasonable opportunity to the petitioner to have its say in the matter, particularly having regard to the nature of the action proposed and the order to be passed. However, the 2nd respondent has proceeded to pass the order based on the available material. Thus, it is clear that the petitioner has been deprived of an opportunity of fair hearing. Principles of natural justice have not been strictly applied. 7. In such circumstances, it is not fair to relegate the petitioner to the alternative remedy available. The matter has to be reconsidered by the 2nd respondent. In my view, ends of justice will be met if the 2nd respondent is directed to provide fair and reasonable opportunity to the petitioner and dispose of the matter afresh with a time frame to be fixed. Hence, the following: :ORDER: The petitions are allowed. Impugned order and the consequential, demand notice are set aside. The matter is 6 remitted for fresh consideration to the 2nd respondent. Petitioner is directed to appear before him on 19.1.2015 at 3 p.m., whereupon the 2nd respondent after providing reasonable opportunity of personal hearing to the petitioner, pass appropriate orders as expeditiously as possible at any rate within a period of three months thereafter. Learned Addl. Government Advocate is permitted to file memo of appearance within two weeks. Sd/- JUDGE Psg* "