2013 (3) TMI 496 - HC - VAT and Sales Tax

Notice U/s 25(1) of the KVAT Act - Delivery / issue of order - Sought time for filing objections - By the time Ext.P3 was received the order was already passed - Held that - In Govt. Wood Workshop v. State of Kerala another Division Bench had occasion to consider a similar question and following the view taken by a Bench of this Court in T.R.C.S Nos. 15 and 16 of 1981 it was held that the order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. - It is not enough if the order is made signed and kept in the file because such order may be liable to change at the hands of the authority who may modify it or even destroy it before it is made known based on subsequent information thinking or change of opinion. To make the order complete and effective it should be issued so as to be beyond the control of the authority concerned for any possible change or modification therein. Therefore the case of the petitioner is fully covered by the principles laid down by the Division Bench. Thus it is obvious that the respondent has acted illegally in not considering the objections filed by the petitioner and for that reason Ext.P4 is unsustainable. - respondent directed to pass fresh orders on Ext.P1 notice considering Ext.P3 objection and after affording the petitioner an opportunity of being heard.

Summary

Issues:
Challenge to assessment order under the KVAT Act for the year 2005-06. Failure of the respondent to consider objections filed by the petitioner before passing the assessment order.

Analysis:
The petitioner, a public limited company dealing with plastic furniture, challenged an assessment order (Ext.P4) for the year 2005-06 under the KVAT Act. The petitioner received a notice (Ext.P1) on 16.11.2011, requesting objections within seven days. The petitioner sought an extension to file detailed objections through Ext.P2, which was received by the respondent on 23.11.2011. Despite filing objections on 9.12.2011 (Ext.P3), the assessment order was passed on 7.12.2011, dispatched on 3.1.2012, and served on the petitioner on 7.1.2012.

The petitioner contended that the respondent did not consider the objections before passing the assessment order, which was deemed illegal. The petitioner relied on the Division Bench judgment in Cochin Plantations Ltd. v. State of Kerala, emphasizing that an assessment order only becomes effective upon communication to the assessee. The Division Bench held that an assessment order is not complete until it is issued from the assessing authority's office and communicated to the party affected.

The Court considered the submissions and found that the petitioner's case aligned with the principles established in the Division Bench judgment. Consequently, the Court held that the respondent acted illegally by not considering the objections, rendering Ext.P4 unsustainable. The Court quashed Ext.P4 and directed the respondent to pass fresh orders on Ext.P1 notice, taking into account Ext.P3 objections and providing the petitioner with an opportunity to be heard.

In conclusion, the Court's judgment emphasized the importance of due process and proper consideration of objections before passing assessment orders under the KVAT Act. The case serves as a reminder that assessment orders must be effectively communicated to the assessee for them to be valid and sustainable.