M/S. C P BAWA TIMBERS AND SAW MILL v STATE TAX OFFICER, SGST DEPARTMENT; THE STATE OF KERALA; THE COMMISSIONER OF STATE TAX

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM &** **THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI WEDNESDAY,THE 06TH DAY OF MARCH 2019 /15TH PHALGUNA, 1940** **WA.No. 741 of 2019** **AGAINST THE ORDER/JUDGMENT IN WP(C) 2638/2019 of HIGH COURT** ## **APPELLANT/WRIT PETITIONER:** **M/S. C P BAWA TIMBERS AND SAW MILL, 1ST FLOOR, POOKUZHI BUILDING, NELLIKUZHI P.O., KOTHAMANGALAM, REPRESENTED BY ITS MG.PARTNER C.B.PAREETH.** **BY ADVS. SRI.P.S.SOMAN SMT.T.RADHAMANY** ## **RESPONDENTS:** **1 STATE TAX OFFICER, SGST DEPARTMENT, REVENUE TOWER, KOTHAMANGLAAM PIN-686666.** **2 THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN-695001. 3 THE COMMISSIONER OF STATE TAX, GOVERNMENT OF KERALA, TAX TOWER, KARAMANA P.O., THIRUVANANTHAPURAM, PIN-695002.** ## **OTHER PRESENT:** **SRI. V K SHAMSUDEEN SR GP** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 06.03.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** W.A. No.741/2019 -:2:- ## **C.K. ABDUL REHIM & R. NARAYANA PISHARADI, JJ.** **----------------------------------------------------Writ Appeal No. 741 OF 2019 -------------------------------------------------------** _Dated this the 6[th] day of March, 2019_ ## **J U D G M E N T** ## _**Abdul Rehim, J.**_ An assessment completed under Section 25 of the KVAT Act, 2003 was under challenge at the instance of the appellant before the Single Bench in W.P.(C) No.2638/2019, mainly on the ground that objections raised against the pre-assessment notice was not adverted to in a proper manner and the assessing authority had failed to give any reasoning for discarding the contentions raised in the objections. 2. The learned Single Judge, while dismissing the writ petition, observed that, if the grievance of the petitioner is that the assessing authority had not considered the objections in its W.A. No.741/2019 -:3:- proper perspective, the same is an aspect of adjudication or lack of adjudication on merits and that it will not amount to violation of the principles of natural justice. It was found that, since the petitioner has got an effective alternate remedy by way of appeal. The petitioner was permitted to seek the appellate remedy available, with an observation made to the effect that the time spent in prosecuting the writ petition shall be exempted from the period of limitation. Aggrieved by the judgment in the writ petition, the above appeal is filed. 3. On a perusal of Ext.P3, the impugned order of assessment, it is evident that the appellant had filed objection(reply) to the pre-assessment notice. According to the appellant, the assessment was completed and the order was issued on the very same date on which the objections was submitted, i.e. on 31.12.2018. It is evident from Ext.P3 that the assessing authority had reproduced contentions of the assessee contained in the objections filed. But the assessment W.A. No.741/2019 -:4:- order does not reflect any advertence made or consideration of the merits of those objections. Nothing is stated in reply to those objections. In other words, the order does not reflect any application of mind of the assessing authority towards those objections. On the other hand, what is stated in the assessment order is, “ _I have carefully gone through the reply filed by the dealer and found that there is no valid ground in the_ . _reply and not produced any material evidence in this regard”_ Such a blunt and stock observation/statement cannot be treated as a substitute for an actual consideration of the merits of the objections. Since the process of assessment is an exercise which is quasi-judicial in nature the application of mind to the consideration of the objections should reflect in the order, which is lacking in the case at hand. 4. We are of the considered opinion that the non consideration of the objections will definitely vitiate the order of assessment. It is not a case as if the assessee had failed to W.A. No.741/2019 -:5:- submit any objections. When the assessment authority had accepted the objections and reproduced the contentions thereof, it is obligatory on the part of the authority to consider those objections on merits and to state sufficient reasons for repelling those contentions. It is not a question of violating principles of natural justice; but it is a question which go deep into the sustainability of the assessment itself. 5. A further contention raised by the appellant is that no opportunity of personal hearing was afforded before finalization of the assessment. In this regard, learned counsel for the appellant had cited a decision rendered by one among us(Justice C.K. Abdul Rehim) reported in _**Johnson & Johnson Ltd. v. Assistant Commissioner (Assessment)[2011 (2) KHC 506]**_ . It is held therein that the opportunity of hearing provided under Section 25(1) of the KVAT Act is mandatory and is not an empty formality. The assessing authority has to issue a notice proposing personal hearing on the basis of the objections filed, W.A. No.741/2019 -:6:- before finalizing the assessment. 6. In a Division Bench ruling of this court in W.A.1370/2011 dated 02.11.2011(The Commercial Tax Officer and others v. C.U. Mathai), it is held that, if a composite notice is issued at the stage of pre-assessment calling for objections and affording opportunity for personal hearing on any particular date, that can be considered as sufficient compliance of the requirement. In the case at hand, Ext.P1 pre-assessment notice would indicate that it is a composite notice issued calling for objections and fixing the date for personal hearing, on 11.06.2018. It is a fact that the appellant had not filed the objections within the date stipulated therein. However, when the assessing authority had accepted the objections which was filed on a subsequent date, which is evident from the assessment order itself, it contemplates an obligation on the part of the assessing authority to have afford an opportunity of personal hearing to the assessee, especially when the W.A. No.741/2019 -:7:- appellant had made a specific request in Ext.P2 objections for affording an opportunity for personal hearing. 7. The learned Judge had declined interference by observing that there exists an efficacious alternate remedy by way of appeal. But we are of the opinion that, even if such a remedy is invoked by the appellant, the appellate authority will not be in a position to confirm the order of assessment, because of the infirmities pointed out as above. In case the appellate authority is going to consider the merits of the objections raised by the assessee for the first time and arriving at conclusions on the same, that will result in denying an appellate remedy, at least in one stage, to the assessee. 8. Under the above mentioned circumstances, the above writ appeal is hereby allowed. The judgment in W.P.(C) No.2638/2019, dated 12[th] February, 2019 is set aside. The writ petition is allowed and Ext.P5 order of assessment is hereby quashed. The 1[st] respondent is directed to pass fresh orders of W.A. No.741/2019 -:8:- assessment based on the objections already submitted by the appellant, after affording an opportunity of personal hearing to him. For expediting finalization of the assessment, the appellant is directed to appear before the 1[st] respondent for the purpose of personal hearing, through himself or through authorized agent, at 11 a.m. on 18.03.2019. The 1[st] respondent shall conduct the hearing on the said date itself or on any other date to which the matter is adjourned. Fresh assessment order shall be issued on the basis of such hearing, at the earliest, at any rate, within two weeks from 18.03.2019. **Sd/- C.K. ABDUL REHIM, JUDGE** . **Sd/- R. NARAYANA PISHARADI, JUDGE** . ul/- [True copy] P.S. to Judge.