1996 (8) TMI 480 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to deferment orders under Karnataka Sales Tax Act, 1957 for the year 1993-94; Power of Joint Commissioner to defer assessment; Opportunity of personal hearing not granted; Grounds for deferment considered extraneous.

Analysis:
The petitioner, a partnership firm engaged in manufacturing cashew kernels, challenged deferment orders issued by the Joint Commissioner of Commercial Taxes under section 12(6)(b) of the Karnataka Sales Tax Act, 1957. The petitioner contended that the Joint Commissioner lacked the power to defer assessment without a specific independent provision. However, the court held that sub-section 6(b) of section 12 allows for deferment by the Joint Commissioner, extending the limitation period for assessment. The court rejected the argument that an independent provision is necessary for deferment, stating that the legislature can create innovative mechanisms. Thus, the challenge on this ground failed.

Regarding the lack of a personal hearing opportunity, the petitioner claimed that the 3rd respondent was on leave during the scheduled hearing. However, the respondent provided evidence of being present, and the court found that even if a personal hearing was not granted, as the objections were duly considered, it did not violate natural justice principles. Citing a Supreme Court judgment, the court emphasized that personal hearings are not mandatory in all circumstances, especially when quasi-judicial authorities apply their judicial mind to the issues involved. Therefore, the absence of a personal hearing did not invalidate the proceedings.

The petitioner also argued that the ground for deferment was extraneous, as the issue of tax liability on raw cashew was pending before the court. The court disagreed, stating that deferring assessment until the court adjudicated the matter was reasonable. Since the pending issue directly impacted the final assessment, the deferment was justified. Consequently, the court found no merit in the writ petition and dismissed it without costs.