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2021 (3) TMI 89 - HC - VAT and Sales TaxAudit assessment - Violation of Principles of Natural Justice - non-issuance of proper Notice by the respondent Department prior to completion of assessments order under section 37 of the AVAT Act 2003 - Eligibility and Entitlement Certificates for claiming incentives under the Industrial Policy of Assam 2008 and for claiming exemption of tax under the Assam Industries (Tax Exemption) Scheme 2009 - HELD THAT:- The petitioner has not been able to demonstrate as to how it has been prejudiced by the non-issuance of Notice under section 37 to render entire proceedings illegal, inasmuch as, the petitioner admitted to the receipt of Notice under section 36 as well as show causes prior to issuance of penalty. As such, it is not denied by the petitioner that it was not aware of the Audit Assessments pending before the department. As it is seen from the pleadings that the petitioner has received Eligibility Certificate on 26-08-2013 and entitlement certificate on 25-10-2013, i.e. well after the impugned order being passed in any event the petitioner could not have submitted the said certificate prior to passing of the impugned order. As such, non issuance of Notice contemplated under section 37 of the AVAT Act, 2003 in the facts of the present case did not cause the petitioner any prejudice to render on that count alone, the impugned order declared to be illegal as the petitioner was served notice under section 36 at an earlier point of time. There is no challenge to the impugned order on any other grounds other than violation of Principle of Natural Justice. While there is no quarrel with the proposition that the Principle of Natural Justice is required to adhered to, however, the party claiming to be affected by any violation of such principle must necessarily demonstrate the prejudice caused to it by non-issuance of any such notice. In the facts of the present case, the petitioner was well aware that audit assessment for the relevant assessment year is being proceeded with by the department however, in view of the alleged non-cooperation from the petitioner in respect of furnishing of necessary books of accounts/evidences, which is reflected in the recital of the impugned order, the department closed the assessments by resorting to “Best Judgment” assessment under section 37 of the AVAT Act. It is also seen from the provisions of the AVAT Act, 2003 that there is a limitation statutorily provided under section 39 of the Act in respect of Assessments required to be made. Under section 39 of the Act, it is provided that no assessments under the forgoing provisions of the Act shall be made after expiry of five (5) years from the end of which the assessment relates. The non issuance of prior Notice before completing the assessment under section 37 cannot be treated to be sufficient alone to interfere with the orders and demands Notices impugned in the absence of manifest prejudice shown to have been suffered by the petitioner more particularly, when it is the petitioner’s pleaded case that the concerned exemption certificate and the certificate of entitlement was received by the petitioner well after the assessment orders passed. It can be summarised that where procedural or substantive provision of law provide for issuance of prior Notice, their infraction ipso-facto does not always lead to the invalidity of the order passed unless prejudice caused to the litigant is shown except in cases where public interest is involved. The prejudice caused to the litigant should not be a mere apprehension or even a reasonable suspicion apprehend. It should exist as a matter of fact and/or based upon a definite inference of likelihood of prejudice flowing from the non-observance of Natural Justice - although the Notice contemplated under section 37 was not served upon the petitioner as contended, in the facts of the present case, no prejudice is seen to have been caused to the petitioner inspite of prior Notice not being issued requiring interference of the impugned assessment order dated 20-07-2013 passed by the Assessing Officer only on the ground of violating/non-adherence of the Principles of Natural Justice. Upon perusal of the provisions of the AVAT Act, 2003, it is seen that under Section 83, there is a power of rectification under section 83 of the AVAT Act 2003, any authority including Appellate /Revisional Authority or the Appellate Tribunal may on an application or otherwise at any time within three (3) years from the date of any order passed by it, rectify any error apparent on the face of the record. It is also seen from the record that this Court by order dated 24-05-2017 while directing the respondent Department to obtain required instruction, by way of an interim order directed that no coercive against shall be taken against the petitioner on the basis of the order dated 20-07-2003 (Annexure-X) of the writ petition passed by the respondent no. 3 - The department will adequately address the grievances of the petitioner in terms of the representation dated 28-01-2014 filed before the Department and which is presently pending before the Department as fairly submitted by the department counsel. The Department will pass appropriate orders thereon as may be permitted under the provisions of AVAT Act including section 83, read with the Rules as well as per the provisions of the Policy of 2008 and the Scheme of 2009. Petition disposed off.
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