Malabar Institute of Medical Science V. Asst. Commissioner Spl. Circle-1, SGST Department, Kozhikode and Deputy Commissioner State Goods and Service Taxes, Kozhikode and Commissioner of State Tax, State Goods and Service Taxes, Tax Tower Killippalam, Karamana P.O., Thiruvananthapuram

WP(C)/16974/2019

AI Insights

The case involves M/S Malabar Institute of Medical Science, which challenged the re-assessment orders issued by the Assistant Commissioner, Special Circle-1, SGST Department, Kozhikode, under Section 25(1) of the KVAT Act. The petitioner argued that the re-assessment was conducted without a proper opportunity for a personal hearing, violating the principles of natural justice. The court examined the procedural history and found that the petitioner was not afforded a fair hearing as required by law, leading to the decision to set aside the re-assessment orders and remand the case for a new assessment with a proper hearing.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 690783 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 06-08-2019
• Assessment Year: misc
• Other Referred Cases: W.P(C) No. 14047/2018
• Laws Referred To: KVAT Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: THUSHARA JAMES
• Assessee Lawyers: M K HAJARA; C RAMACHANDRAN
• Keywords: Assessment Order; Natural Justice; Personal hearing; Re-assessment; SGST
• Section: 25(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941 WP(C).No.16977 OF 2019(V) PETITIONER: M/S MALABAR INSTITUTE OF MEDICAL SCIENCE MINI BYE PASS ROAD, CALICUT 673 016, REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, P. JAYAKRISHNAN. BY ADVS. SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1 ASST.COMMISSIONER SPL. CIRCLE-1, SGST DEPARTMENT KOZHIKODE 673 020. 2 THE DEPUTY COMMISSIONER STATE GOODS AND SERVICE TAXES, KOZHIKODE 673 020. 3 THE COMMISSIONER OF STATE TAX, STATE GOODS AND SERVICE TAXES, TAX TOWER KILLIPPALAM, KARAMANA P.O., THIRUVANANTHAPURAM 695 002. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2019, ALONG WITH WP(C).11770/2019(U), WP(C).11838/2019(D),WP(C).14208/2019(A),WP(C).16974/2019(V) , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16977 OF 2019 & connected cases -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941 WP(C).No.11770 OF 2019(U) PETITIONER: M/S MALABAR INSTITUTE OF MEDICAL SCIENCE MINI BYE PASS ROAD, CALICUT, 673016. REPRESENTED BY ITS CHIEF FINANCIAL OFFICER P. JAYAKRISHNAN BY ADVS. SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1 ASST.COMMISSIONER SPL. CIRCLE -I, SGST DEPARTMENT, KOZHIKODE, PIN - 673020 2 THE DEPUTY COMMISSIONER STATE GOODS AND SERVICE TAXES, KOZHIKODE, 673020 3 THE COMMISSIONER OF STATE TAX STATE GOODS AND SERVICE TAXES, TAX TOWER, KILLIPPALAM, KARAMANA P. O., THIRUVANANTHAPURAM - 695002 OTHER PRESENT: GP. DR. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2019, ALONG WITH WP(C).11838/2019(D), WP(C).14208/2019(A),WP(C).16974/2019(V),WP(C).16977/2019(V), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16977 OF 2019 & connected cases -3- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941 WP(C).No.11838 OF 2019(D) PETITIONER: M/S MALABAR INSTITUTE OF MEDICAL SCIENCE MINI BYE PASS ROAD, CALICUT 673 016, REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, P. JAYAKRISHNAN, BY ADVS. SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1 ASSISTANT COMMISSIONER SPL. CIRCLE-1, SGST DEPARTMENT, KOZHIKODE 673 020. 2 THE DEPUTY COMMISSIONER, STATE GOODS AND SERVICE TAXES, KOZHIKODE 673 020. 3 THE COMMISSIONER OF STATE TAXES, TAX TOWER, KILLI SATE GOODS AND SERVICE TAXES, TAX TOWER, KILLIPPALAM, KARAMANA P.O., THIRUVANANTHAPURAM 695 002. GP. DR. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2019, ALONG WITH WP(C).11770/2019(U), WP(C).14208/2019(A),WP(C).16974/2019(V),WP(C).16977/2019(V), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16977 OF 2019 & connected cases -4- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941 WP(C).No.14208 OF 2019(A) PETITIONER: M/S MALABAR INSTITUTE OF MEDICAL SCIENCE MINI BYE PASS ROAD, CALICUT, 673016. REPRESENTED BY ITS CHIEF FINANCIAL OFFICER P JAYAKRISHNAN BY ADVS. SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1 ASST. COMMISSIONER SPL.CIRCLE-1, SGST DEPARTMENT, KOZHIKODE PIN- 673020 2 THE DEPUTY COMMISSIONER, STATE GOODS AND SERVICE TAXES, KOZHIKODE-673020 3 THE COMMISSIONER OF STATE TAX STATE GOODS AND SERVICE TAXES, TAX TOWER, KILLIPPALAM, KARAMANA.P.O, THIRUVANANTHAPURAM- 695002 BY GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2019, ALONG WITH WP(C).11770/2019(U), WP(C).11838/2019(D), WP(C).16974/2019(V), WP(C).16977/2019(V), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16977 OF 2019 & connected cases -5- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI TUESDAY, THE 06TH DAY OF AUGUST 2019 / 15TH SRAVANA, 1941 WP(C).No.16974 OF 2019(V) PETITIONER: M/S.MALABAR INSTITUTE OF MEDICAL SCIENCE, MINI BYE PASS ROAD, CALICUT- 673016, REPRESENTED BY ITS CHIEF FINANCIAL OFFICER, P.JAYAKRISHNAN. BY ADVS. SMT.M.K.HAJARA SRI.C.RAMACHANDRAN RESPONDENTS: 1 ASST.COMMISSIONER, SPL.CIRCLE-I, SGST DEPARTMENT, KOZHIKODE, PIN- 673020. 2 THE DEPUTY COMMISSIONER, STATE GOODS AND SERVICE TAXES, KOZHIKODE- 673020. 3 THE COMMISSIONER OF STATE TAX, STATE GOODS AND SERVICE TAXES, TAX TOWER, KILLIPPALAM, KARAMANA P.O., THIRUVANANTHAPURAM- 695002. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2019, ALONG WITH WP(C).11770/2019(U), WP(C).11838/2019(D),WP(C).14208/2019(A),WP(C).16977/2019(V), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16977 OF 2019 & connected cases -6- JUDGMENT Heard Adv. M.K Hajara, the learned counsel for the petitioner and Dr. Thushara James the learned Government Pleader appearing for the respondents. 2. M/S Malabar Institute of Medical Science Mini Bye Pass Road, Calicut is the petitioner in the instant writ petitions. The petitioner challenges orders made under Section 25(1) of KVAT Act(for short 'the Act') as illegal and violative of principles of natural Justice. The impugned orders cover assessment years 2011-2012; 2012-2013, 2013- 2014, 2014-2015 and 2015-2016. 2.1 W.P(C) No. 11838 of 2019 is treated as the lead case as the relevant dates which have bearing on disposal of the writ petition are substantially same. The learned counsel have referred to the dates and events in W.P(C) No. 11838/2019 and have stated that by referring to the dates in lead writ petition, the five writ petitions could be disposed of. WP(C).No.16977 OF 2019 & connected cases -7- 2.2. W.P(C) No. 11838 Of 2019 is filed questioning Ext.P1 assessment order dated 25.03.2019 made under Section 25(1) for the assessment year 2011-2012. The other writ petitions are filed pursuant to the assessment orders passed for the different assessment years. 3. To briefly state the respective writ prayers, the following tabular statement is prepared and incorporated. Serial No Writ petition No Assessment year Exhibits 1 11770/2019 2012-2013 Ext.P1 2 14208/2019 2013-2014 Ext.P1 3 16977/2019 2014-2015 Ext.P1 4 16974/2019 2015-2016 Ext.P1 4. This Court directed the respondent to produce the original records in these writ petitions from the office of Assistant Commissioner Special Circle, Kozhikode. The original records are produced and perused. 4.1 The petitioner avers that the petitioner is duly compliant with the statutory obligations WP(C).No.16977 OF 2019 & connected cases -8- under the Act, had filed return for the assessment year 2011-2012 and the respondent vide order No. 32110842352/2011-12 dated 13.11.2017 finalized the assessment. The respondent proposing to re-examine the Gp of 3.10% claimed by petitioner and notionally arriving at Gp of 25%, issued notices dated 16.01.2019 and 23.02.2019 to petitioner. The petitioner requested time and it was granted. The petitioner finally submitted objection dated 01.03.2019 on 25.03.2019 and Ext.P1 order impugned in this writ petition was passed. The petitioner asserts that there is no occasion warranting re- assessment under Section 25(1) of the Act. The respondent issued show cause notices for a few assessment years and should have given opportunity of hearing before an order under Section 25(1) of the Act is passed. The respondents do not dispute the Statutory obligation to afford personal hearing to petitioner in re-assessment under Section 25(1) of the Act. But the reply given is that the objection stated on 01.03.2019, do not in any way WP(C).No.16977 OF 2019 & connected cases -9- show that a new case is made out against the proposed assessment warranting personal hearing by respondent No.1. Therefore, the Assessing Officer felt that affording opportunity of personal hearing would be an empty formality, keeping in mind the opportunities already afforded to petitioner as stated in Ext.P1 order. 4.2 From the original record the chronology of events is stated thus: 16.1.2019 Notice under Section 25(1) of the Act 11.2.2019 Reply filed by petitioner 23.2.2019 Notice issued intimating the date of hearing as 5.3.2019 01.03.2019 Objections are filed 05.03.2019 Nothing is placed before the Court to show that hearing had in fact taken place on 5.3.2019 4.3. After perusing the record this Court is of the view that any of the hearings taken independently or together do not amount to giving opportunity of hearing to petitioner by R1. The first notice was issued in the month of January and WP(C).No.16977 OF 2019 & connected cases -10- the order was made on 25.03.2019. The challenge against impugned order could be separated and understood from two perspectives. 5. Firstly, till the petitioner gave further objections on 01.03.2019, there is nothing on record to suggest that personal hearing is actually afforded and the matter stood adjourned for supplementing the hearing by way of written objections etc. The record refers to adjourning the hearing from time to time. The petitioner, by filing objections on 01.03.2019, has come forward to demonstrate the case the petitioner is putting forward against the proposed assessment by R1. 6. It is in fitness of things that respondent No.1 ought to have given a clear date for hearing the writ petitioner upon receiving objection dated 01.03.2019 and thereafter passed Ext.P1 order. Issues now re-assessed are fairly complex and the financial implication resulting from the proposed assessment is substantial as well. Under those circumstances the events noted in record between WP(C).No.16977 OF 2019 & connected cases -11- 16.01.2019 and 01.03.2019 do not satisfy that opportunity of personal hearing was given to petitioner. Likewise admittedly there is no hearing after 01.03.2019 to make good the deficiency in affording opportunity of hearing prior to 01.03.2019. The argument that objections filed on 01.03.2019 do not warrant hearing, is subjective and R1 could not have assumed that hearing would be nothing but an empty formality. On the ground that without giving petitioner opportunity of hearing on the objections filed in this behalf, Ext.P1 order is set aside and the matter restored to file of respondent No.1. The petitioner is directed to appear before respondent No.1 on 21.08.2019. The respondent on 21.08.2019 or on any other date, to which the matter stands posted completes the assessment. The assessment is completed on or before 05.09.2019. The grounds raised in other writ petitions since is substantially same and similar and for the very same reasons recorded above, the orders impugned in the above writ petitions are set WP(C).No.16977 OF 2019 & connected cases -12- aside. Matters restored to the file of respondent No.1 for disposal as noted above. The writ petitions are disposed of accordingly. SD/- S.V.BHATTI SJ JUDGE WP(C).No.16977 OF 2019 & connected cases -13- APPENDIX OF WP(C) 16977/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE RE OPENED ASSESSMENT ORDER NO. 32110842352/14-15 DATED 10.5.2019 EXHIBIT P2 A TRUE COPY OF THE ORIGINAL ASSESSMENT ORDER NO. 32110842352/14-15 DATED 7.5.2018 EXHIBIT P3 A TRUE COPY OF THE ORDER IN WPC NO. 14047/2018 DATED 18.1.2019 WP(C).No.16977 OF 2019 & connected cases -14- APPENDIX OF WP(C) 11770/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE RE OPENED ASSESSMENT ORDER NO.32110842352/12-13 DATED 25.03.2019 EXHIBIT P2 A TRUE COPY OF THE ORIGINAL ASSESSMENT ORDER NO.32110842352/1213 DATED 14.11.2017 EXHIBIT P3 A TRUE COPY OF THE ORDER IN W. P.(C) NO.14047/2018, W.A.1896/2012 DATED 18.01.2019 EXHIBIT P4 A TRUE COPY OF THE INCOME TAX RETURN FOR THE FINANCIAL YEAR 2011-12 (ASSESSMENT YEAR 2012-13). EXHIBIT P4(A): A TRUE COPY OF THE INCOME TAX RETURN FOR THE FINANCIAL YEAR 2012-13 (ASSESSMENT YEAR 2013-14). EXHIBIT P4(B): A TRUE COPY OF THE INCOME TAX RETURN FOR THE FINANCIAL YEAR 2013-14 (ASSESSMENT YEAR 2014-15). EXHIBIT P4(C): A TRUE COPY OF THE INCOME TAX RETURN FOR THE FINANCIAL YEAR 2014-15 (ASSESSMENT YEAR 2015-16). EXHIBIT P4(D): A TRUE COPY OF THE INCOME TAX RETURN FOR THE FINANCIAL YEAR 2015-16 (ASSESSMENT YEAR 2016-17). EXHIBIT P5: A TRUE COPY OF THE ACKNOWLEDGEMENT FOR THE YEAR 2011-12 DATED 05/03/2019 EXHIBIT P5(A): A TRUE COPY OF THE ACKNOWLEDGEMENT FOR THE YEAR 20112-13 DATED 05/03/2019 EXHIBIT P5(B): A TRUE COPY OF THE ACKNOWLEDGEMENT FOR THE YEAR 2013-14 DATED 05/03/2019 WP(C).No.16977 OF 2019 & connected cases -15- EXHIBIT P5(C): A TRUE COPY OF THE ACKNOWLEDGEMENT FOR THE YEAR 2014-15 DATED 05/03/2019 EXHIBIT P5(D): A TRUE COPY OF THE ACKNOWLEDGEMENT FOR THE YEAR 2015-16 DATED 05/03/2019 WP(C).No.16977 OF 2019 & connected cases -16- APPENDIX OF WP(C) 11838/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE ORDER NO. 32110842352/2011-12 DATED 25.3.2019. EXHIBIT P2 A TRUE COPY OF THE ORDER NO. 32110842352/2011 -12 DATED 13.11.2017. EXHIBIT P3 A TRUE COPY OF THE ORDER IN WPC NO. 14047/18 E , W.A. NO. 1896/12, 1958/12 ETC, DATED 18.1.2019. RESPONDENT'S/S EXHIBITS: EXHIBIT R 1A TRUE COPY OF THE ANNUAL RETURN FOR THE YEAR 2011-12. EXHIBIT R1 B TRUE COPY OF THE LETTER DATED 10.11.2017. EXHIBIT R1 C TRUE COPY OF THE NOTICE DATED 16.01.2019. EXHIBIT R1 D TRUE COPY OF THE NOTICE DATED 23.02.2019. WP(C).No.16977 OF 2019 & connected cases -17- APPENDIX OF WP(C) 14208/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE RE OPENED ASSESSMENT ORDER NO.32110842352/13-14 DATED 10.04.2019 EXHIBIT P2 A TRUE COPY OF THE ORIGINAL ASSESSMENT ORDER NO.32110842352/13-14 DATED 26.12.2017 EXHIBIT P3 A TRUE COPY OF THE ORDER IN WP(C)NO.14047/2018 DATED 18.01.2019 WP(C).No.16977 OF 2019 & connected cases -18- APPENDIX OF WP(C) 16974/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE RE OPENED ASSESSMENT ORDER NO.32110842352/15-16 DATED 10.05.2019. EXHIBIT P2 A TRUE COPY OF THE ORIGINAL ASSESSMENT ORDER NO.32110842352/15-16 DATED 08.11.2017. EXHIBIT P3 A TRUE COPY OF THE ORDER IN WP(C)NO.14047/2018 DATED 18.01.2019. "