M/S. PURE GOLD JEWELLERS v. ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, COMMERCIAL TAX COMPLEX, POOTHOLE, THRISSUR-680004; INTELLIGENCE OFFICER, COMMERCIAL TAXES, SQUAD NO.III, COMMERCIAL TAX COMPLEX, POOTHOLE, THRISSUR-680004; DEPUTY TAHSILDAR (REVENUE RECOVERY), THALUK OFFICE, THRISSUR-680001

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **TUESDAY, THE 10TH DAY OF JANUARY 2017/20TH POUSHA, 1938** **WP(C).No. 472 of 2017 (H) --------------------------** ## **PETITIONER(S): -------------** **M/S.PURE GOLD JEWELLERS, TC 8/268, THOTTAN PETTA, EAST FORT, THRISSUR-680005, REPRESENTED BY ITS PARTNER, MT.SHINGSY RAPHEL.** **BY ADV. SRI.TOMSON T.EMMANUEL** **RESPONDENT(S): --------------** **1. ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, COMMERCIAL TAX COMPLEX, POOTHOLE, THRISSUR-680004.** **2. INTELLIGENCE OFFICER, COMMERCIAL TAXES, SQUAD NO.III, COMMERCIAL TAX COMPLEX, POOTHOLE, THRISSUR-680004.** **3. DEPUTY TAHSILDAR (REVENUE RECOVERY), THALUK OFFICE, THRISSUR-680001.** ## **BY GOVERNMENT PLEADER SRI. V.K.SHAMSUDDIN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10-01-2017, ALONG WITH W.P.(C).750/2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **EL** ## **WP(C).No. 472 of 2017 (H)** ## **--------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **----------------------EXHIBIT P1 COPY OF ORDER DATED 12-02-2014 PASSED U/S.74 OF THE KVAT ACT BY 2ND RESPONDENT, AGAINST THE COMPOUNDING APPLICATION SUBMITTED BY PETITIONER. EXHIBIT P1(A) COPY OF CASH RECEIPT NO.5025891 FOR RS.3,98,200/ISSUED TO PETITIONER BY 2ND RESPONDENT IN COLLECTING COMPOUNDING FEE U/S.74, REFERRED IN EXT. P2. EXHIBIT P1(B) COPY OF CASH RECEIPTS ISSUED BY 2ND RESPONDENT IN COLLECTING ADMITTED TAX AND INTEREST IN 3 INSTALLMENTS AMOUNTING TO RS.3,98,000/- TOWARDS THE ASSESSMENT YEAR 2013-14.** **EXHIBIT P2 COPY OF ANNUAL RETURN DATED 30-10-2015 SUBMITTED FOR THE YEAR 2013-14, WITH PROOF OF PAYMENT OF OUTPUT TAX. EXHIBIT P3 COPY OF NOTICE DATED 17-10-2016 ISSUED TO PETITIONER U/S.25(1) TO KVAT ACT FOR 2013-14, BY 1ST RESPONDENT, PROPOSING BEST JUDGMENT ASSESSMENT.** **EXHIBIT P4 COPY OF DETAILED REPLY DATED 29-11-2016 SUBMITTED BY PETITIONER BEFORE 1ST RESPONDENT, AGAINST EXT P3 NOTICE.** **EXHIBIT P5 COPY OF ORDER DATED 05-12-2016 PASSED BY 1ST RESPONDENT FOR THE YEAR 2013-14, IN COMPLETING BEST JUDGMENT ASSESSMENT AS PROPOSED, WITHOUT EVEN CREDITING AMOUNTS PAID IN EXT P2(B) AND FURTHER DEMAND OF INTEREST.** **EXHIBIT P6 COPY OF REQUEST DATED 24-12-2016 MADE U/S.66 OF KVAT ACT FOR RECTIFICATION OF MISTAKES IN EXT P5 ORDER, SENT BY SPEED POST TO 1ST RESPONDENT.** ## **RESPONDENT(S)' EXHIBITS -----------------------** ## **NIL** **TRUE COPY** **P.S. TO JUDGE** **EL** ## **K. VINOD CHANDRAN, J. =====================** ## **W.P.(C)Nos.472 of 2017 - H and 750 of 2017-P ================================ Dated this the 10[th] day of January, 2017** ## **J U D G M E N T** The petitioner in W.P.(C) No.472 of 2017 is aggrieved with Ext.P5 assessment order and seeks for consideration of the rectification application filed at Ext.P6. The reason for filing rectification application is that the petitioner was not granted an adequate opportunity for hearing, thus resulting in violation of principles of natural justice. The petitioner was issued with notice at Ext.P3, fixing the date of hearing on 05.11.2016. The petitioner did not turn up for hearing on 05.11.2016, but filed an objection as seen from Ext.P4 dated 29.11.2016. The objection was also submitted through post. The Assessing Officer considered the objection filed, by Ext.P5 and finalised the assessment, however without granting any opportunity for hearing. 2 W.P.(C)No.472 of 2017 and 750 of 2017 ## 2. The reason stated for not issuing a hearing notice is seen in the order itself at page 7, which is extracted herein below:- e) In the pre-assessment notice hearing date was scheduled and the assessee asked adjournment and the same was granted. So while filing the reply ie; on 29.11.2016 assessee should have availed the opportunity of personal hearing. Further procrastination of hearing is a willful tact by the assessee to prolong the proceedings with baseless requests. 3. This Court frequently comes across contentions raised, on finalisation of assessment in a similar manner; of grounds of violation of principles of natural justice, for reason only of the Assessing Officer having failed to give adequate opportunity of hearing to the assessee. This Court has also come across notices, which direct filing of objections within a particular period and also directing appearance for hearing at any date on a specified time before the Assessing Officer. In the present case, the notice at Ext.P3 called for objections and 3 W.P.(C)No.472 of 2017 and 750 of 2017 also posted the case for hearing on 05.11.2016. This practise of issuing a composite notice has been deprecated by a learned Single Judge of this Court in **Suzion Infrastructural** v. **CTO (WC)[(2010) 3 KHC 299]** . 4. However later on, in an appeal from a similar judgment directing a re-hearing, a Division Bench of this Court had modified the same to the extent of directing the Assessing Officers to give an opportunity for hearing, if the assessee specifically asks for that in their objection (W.A No.1317 of 2011 dated 02.11.2011). Hence in cases where the assessee does not ask for a personal hearing there could be a finalisation of the assessment without a hearing. But to avoid multiplicity of litigation on this ground it would always be ideal for the Assessing Officers to issue notice giving a specific period for filing objection and then after considering the objection to issue notice for hearing, even if the assessee has 4 W.P.(C)No.472 of 2017 and 750 of 2017 not specifically asked for such a hearing. If no objections are filed and not even a response made requesting for further time or otherwise, then the assessment could be finalised. It would in that context be permissible for the Assessing Officers to once more issue a further notice, if the first one is not responded to, giving yet another chance. This definitely would result in a bit of delay due to the procedural rigmarole; but in the long run this would ensure avoidance of any ground being raised of violation of principles of natural justice; for not affording a reasonable opportunity for hearing, which is a statutory mandate as per the 1[st] proviso to Section 25. 5. In the present case, though objections were called for and hearing was posted on 05.11.2016 in Ext.P3, the assessee admittedly filed his objections only on 29.11.2016. The assessment proceedings at that point was not over and the Assessing Officer took note of the objections in the order 5 W.P.(C)No.472 of 2017 and 750 of 2017 passed. The Assessing Officer has stated in Ext.P5 that the assessee could have availed of the opportunity for hearing on 29.11.2016, when the objection was filed. That is to say that the assessee on filing objection should get ready for hearing and appear before the Assessing Officer, without any reference to the convenience of the Assessing Officer. Further, by Ext.P4 objection, the petitioner had also requested for a personal hearing, which the Assessing Officer did not specifically provide for. 6. In the totality of the circumstances, this Court is of the opinion that the order of assessment itself has to be set aside on grounds of violation of principles of natural justice. Ext.P5 hence would stand set aside, without any observation on merits of the assessment made therein. 7. In W.P(C) No.750/2017 notice was issued as seen from Ext.P6 calling for objections and granting an opportunity 6 W.P.(C)No.472 of 2017 and 750 of 2017 of hearing at 11.00 a.m on 02.06.2016. As in the earlier case, the objections were filed at Ext.P7 dated 27.06.2016. The assessment order passed at Ext.P8 notice a reply of the dealer dated 1.7.2016 probably noticing the date of receipt of the objections. In Ext.P7 the petitioner had also sought for an opportunity for hearing. On the very same reasoning Ext.P8 is set aside. 8. The petitioners in both the writ petitions would appear before the respective Assessing Officer on 20.01.2017 at 11 AM, on which date, a date for hearing would be intimated to the petitioner or his authorised representative and acknowledgment received in person. The assessment would be completed within a month from the date of hearing. 9. The Registry is directed to communicate this order to the Commissioner of Commercial Taxes, who shall issue necessary instructions to the concerned authorities to 7 W.P.(C)No.472 of 2017 and 750 of 2017 avoid multiplicity of litigation before this Court under Article 226 of the Constitution of India on grounds of violation of principles of natural justice. The writ petitions would stand allowed. **Sd/-** **K. VINOD CHANDRAN, JUDGE** SB/11/01/2017 // true copy // P.A to Judge