M/s. Rusat Timber Depot V. Deputy Commercial Tax Officer and another

WP/23980/2020

AI Insights

In this case, M/s. Rusat Timber Depot, represented by its partner Chlgan Lal Patel, filed a writ petition against the Deputy Commercial Tax Officer and the Principal Secretary to Government, Revenue (CT-II) Department, challenging the assessment order for the year 2015-16 under the Central Sales Tax Act, 1956. The petitioner contended that the assessment was made without proper service of notice and in violation of the principles of natural justice, as the notice was allegedly communicated via email, which is not a permissible mode of service under the relevant VAT rules. The court found that there was indeed a violation of natural justice, as the petitioner was not afforded a personal hearing nor properly served with the show cause notice, leading to the setting aside of the assessment order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 726623 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 22-01-2021
• Assessment Year: misc
• Other Referred Cases: Godrej Agrovet Limited
• Laws Referred To: Constitution of India, Central Sales Tax Act, 1956, Telangana VAT Rules, 2005
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M GOVIND REDDY
• Assessee Lawyers: S DWARAKANATH
• Keywords: Assessment Order; Personal hearing; Show cause notice; Violation of natural justice; Writ of Certiorari
• Section: 226; 15(1)

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE TWENTY SECOND DAY OF JANUARY TWO THOUSAND AND TWENTY ONE PRESENT THE HON'BLE SRI JUSTICE M,S. RAMACHANDRA RAO AND THE HON'BLE SRI JUSTICE T. AMARNATH GOUD WRIT PETITION NO: 23980 OF 2020 Between: M/s. Rusat Timber Depot, rep. by its Partner I/r. Chlgan Lal Patel l ,4iyapur, Boltaram Roid,Hyderabad-s0O 05, Ranga Reddy District,# 1-112113, ...PETITIONER AND 1 2 Deputy Commercial Tax Officer, Ir/adhapur-4 Circle' Hyderabad Rural Division, Hvderabad. Siale oiieiangana, rep. by its Principal Secretary to Governmenl, Revenue (CT- ll)Department, Secretariat, Hyderabad. ...RESPONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a Writ of Cerliorari or any other appropriate writ, order or direction quashrng the impugned order of the lst Respondent in. Ao No.44815, daled 2910312020 for the assessment year 2015-16 under the csT Act, 1956 as illegat, arbitrary, in violation of principles of natural justice and contrary to law and direct the lst Respondent to re-do the assessment afresh, after serving the show cause notice in accordance with Rule 64 of the VAT Rules and granting an opportunity to file objections, documentary evidence and an opportunity of personal hearing and then pass an adjudicated order in accordance with law lA NO: 1 OF 2020 Petition under Section 15'l CPC praying that in the crrcumstances stated in the affidavit filed in support of the petition, the High court may be pleased to grant interim stay of recovery of the disputed tax of Rs.38,84 ,2641-',f or the assessment year 2015- 16 (csT) pursuant to the impugned order of the 1st Respondent daled 29l3l2O2O pending disposal of the writ Petition, as otherwise the Petitioner will be put to severe loss and hardship, Counsel for the Petitioner: SRl. S. DWARAKANATH Counsel for the Respondents: SRI M. GOVIND REDDY' SPECIAL COUNSEL FOR COMMERCIAL TAXES The Court made the following: ORDER HONOURABLE SRI JUSTICE M,S.RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE T.AMARNATH GOUD ORDER: (Per Hon'ble Sri Justice M.S. Ramachandra Rao) In this Writ Petition, the petitioner assails the assessment order AO No.44815 dt.29-03-2020 passed by the l\" respondent under Curtral Sale-s Tax Act. 1956 (fbr short 'the Act') fbr the pe'riod April, 20I 5 to Nlalch. 2016. l)ctitioner contencls that a shos caLlsc notice hrrd bcen sent br a valid mode of service under Rule 64(1)(b) of the Telangana VAT Rules, 2005; petitioner could not have filed a reply thereto as he was busy with the tax audit under the Income Tax Act; petitioner stafted collecting information to substantiate the claim for exemption in the month of February, 2020; but even before the petitioner could submit the docur-nentary evidence, the irnpugned order has been passed or-r the pretext that the assessrnent would get time barredl and that even the suicl oldc'r rvas cornmurricated to the petitioner through e.rlail. u ltich is not a pelmissible rnode of service uncler Rule 64( I )(b) ol the Telangana VAT Rules, 2005. Petilionc'r conteuds that a garnisl'ree notice was received tiom l e.rnail on 04-06-2019 to the petitioner by l'' respondent, which is not 3 the I't respondent on 2l-11-2020 by the banker ofthe petitioner for. WRIT PETITION No.23980 of 2020 I .e covery o1'a surr ol Rs.38,84,264l- lbr rhe per.iod 20 I 5- l6 Lrnder thc Act. 4. Petitioner contends that petitioner is in possession of cer.tain .[]. fonn declarations and it approached the territorial Deputy Conrmissioner to accept the same as per the judgrnent in Godrej Agrovet Limitedr, but the latter refused to accept the same. i. Accoldine to the petitioner. siqned copy. of the order as not conrr.Iunicarecl to the' petitioncr till l6- l:-1010. though in rhc nre'untinte attachntent nolicc dt.l l- I l-1010 harl bccn r.c.r.oliccl lrr tlrc l'i le-spondcnt. 6. ['etitiorcl c..tclrtls t]tat riitltoLrt serr ing ltrc-assessntcnt sltori causc notice as pel' the proYisions o1'the 'fe langana VAI- RLrlcs. thc J\" r'espondent could not have passed the itlpugned order. 7. Petitioner also contends that petitioner had not filed any response on 22-11-2019 as is alleged in the irnpugned or.der; that petitioner was also not afforded a personal hearing; and no final shon, cause notice dt.06-03-2020 was served on petitioner. bv the l\" respondent. 8. 'fhese lacts are not dispLrted b1. Sri V.Govind Itcddl . icarnecl Spc-cial Cor\"rrrscl lbr Conrntercial faxes appearing tbr l.csllond!.nts. |. 'l I APSTJ 92 3 I 9. We are satisfietl that in the facts and circumstances of the case, there has been a violation ofprinciples ofnatural justice causing grave prejudice to the petitioner. 10. 'l herefbre, the Writ Petitioner is allorved; the Assessment Order.. O o.-l-1815 clt.l9-01-1010 passcd br l'' respondL'nr is ser aside: the ntatter is rentitted back to the I'r rr.sponclent fbr tiesh cousidr.ration; the 1't re'spondent is directed to issue show cause notice to the pctitioner indicatinil LhL. tLlrnover proposecl to be t]xed unclcr the Act arrcl also the tax proposed to be levied thereon in accordance. r,ith Rule 64(l)(b) of the 'Ielangana VAT Rules, 20051 peririoner is granted six (06) weeks time lrom the date of receipt of such show cause to file objections along with supporting material; a personal hearing shall be provided to the petitioner; and then a reasoned order be- passed by 1'1 respondent in accordance with law and be commllnicated to the petitioner. No costs. IL Conseqr-rentlv, rriscellaneous petitions, pending if an1,, shall stand c losed. ess Sll.?ts$JJilYtlil ,TRUE COPY/I ,./ SECTION OFFICER The Deputy Commercial Tax Officer, lt4adhapur-4 Circle, Hyderabad Rural D jvision, Hyderabad. The Principal Secretary to Government, Revenue (CT-ll) Department, State of Telangana, Secretariat, Hyderabad. One CC to Sri S. Dwarakanath, Advocate [OPUC] One CC to Sri M. Govind Reddy, Special Counsel for Commercial Taxes loPUCl Two CCs to GP for Commercial Tax, High Court for the State of Telangana at Hyderabad. [OUT] Two CD Copies To, 1. 2. 3. 4. t 6. CHR ^\"-.- HIGH COURT DATED:2210112021 ORDER W.P.No.23980 of 2020 ALLOWING THE WRIT PETITION WITHOUT COSTS e& i'l , )tr o' o- \"'-o\"i i01 tEB 2021 IA Yl 1 ( a .L. ^.7 t),:s o o "