Mercy John vs Commissioner of Commercial Taxes and Others

P.R. Ramachandra Menon, J.�The validity of exhibits P9 and P10 revised assessment orders passed by the fourth respondent in respect of the assessment years 2005-06 is under challenge in this writ petition. The sequence of events given in the writ petition shows that the petitioner is mainly dealing with "coir mats" and also is a registered dealer under the Kerala Value Added Tax Act dealing with "cotton tapes" as well. According to the petitioner, the item "cotton tape" comes under entry 51 of the First Schedule to the KVAT Act and therefore, there is complete exemption from the tax liability. It is stated that the assessment proceedings were finalized pursuant to exhibits P1 and P2 orders passed by the appellate authority, leading to exhibits P3 and P4 revised assessment orders. Years after passing the said order, the proceedings were sought to be "suo motu" revised by the fifth respondent, invoking the power and procedure under section 56 of the KVAT Act, 2003, presumably based on some audit objection. The petitioner was served with exhibits P6 and P7 notices under section 25(1). Said notices are dated July 2, 2014. Though the petitioner sought for reasonable time to file reply, the same was not acceded to and the assessing authority simply proceeded to finalize the proceedings on the basis of his own convictions, leading to exhibits P9 and P10 orders, which in turn are under challenge.

Heard Mr. K.B. Mohamedkutty, the learned senior counsel for the petitioner, as well as the learned Government Pleader for the respondents.

The learned senior counsel for the petitioner submits that the proceedings have been finalized by the concerned respondent, simply signing at dotted line, dancing to the tunes of somebody else, who is behind the curtain. It is stated that, the proceedings have been made a mockery of, leading to finalization of the proceedings in the manner as designed by the authorities of the audit department, which is totally alien to the scheme of the statute. It is also stated that, the proceedings are barred by limitation, which contention is sought to be rebutted by the learned Government Pleader with reference to the facts and figures and the materials on record.

On going through the materials on record, this court finds that the assessing officer, by issuance of pre-assessment notice to the petitioner, granted only three days'' time for filing objection. The fact that the petitioner sought for adjournment for filing reply and for producing the books of accounts stands conceded in exhibits P9 and P10 orders itself. The version of the concerned respondent is that, since it is a long pending case and since he has to report the matter to the higher authority, it had to be finalized and hence exhibits P9 and P10 orders.

After hearing both the sides, this court finds that, the proceedings have been finalized by passing exhibits P9 and P10 orders by the fourth respondent with unwarranted haste, and virtually denying an effective opportunity of hearing to the petitioner. In the said circumstance, this court finds that, the said orders cannot stand the test of judicial scrutiny of this court and they stand set aside. It will be open for the fourth respondent to finalize the proceedings afresh, after giving an effective opportunity to produce the relevant books of accounts and hearing. The proceedings as above shall be finalized and orders shall be passed in accordance with law, on the basis of merits involved and untrammelled by any direction from any corner, to have the assessment finalized in any particular manner. This shall be done at the earliest, at any rate, within "six weeks" from the date of receipt of a copy of this judgment. It is further made clear that an independent decision shall be taken by the fourth respondent with proper application of mind. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the concerned respondent for further steps. The writ petition is disposed of.