TMI Blog2020 (8) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... .2020, which is impugned in this petition, we, therefore, deem it appropriate to entertain this petition and at the joint request made by both the sides, matter deserves to be remitted, quashing and setting aside the impugned order of assessment. There are many procedural lapses on the part of the respondent No.2 going to the root of the matter. There is no escape from the fact that the hearing for the purpose of imposing penalty under the Act, 2003 pursuant to the notice issued in that regard in Form No.309 was fixed on 24th March 2020. The notice in Form No.309 is dated 17th March 2020. However, it appears that when the representative of the writ applicants appeared before the respondent No.2 on 17th March 2020, a copy of the Form No.309 was served upon him and on the very next date i.e. 18th March 2020, the hearing was undertaken and the order also came to be passed on the very same date including the order of penalty. We are not convinced with the manner in which the proceedings have been dealt with by the respondent No.2. It would have been very easy for us to decline to entertain this writ application on the ground that the remedy of appeal is available to the writ appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Value Added Tax Act. 2.2 The writ applicant No.2 carried out the assessment proceedings under Sub-section (2) of Section 34 of the VAT Act for the period 2015-16. The respondent No.2 assessed total dues of ₹ 56,12,988/-, which includes the value added tax to the tune of ₹ 17,43,164/-, interest of ₹ 12,55,078/- thereon and the penalty of ₹ 26,14,746/- imposed at the rate of 150% under Section 34(12) of the VAT Act vide the impugned assessment order dated 18th March 2020 passed in form No.304 under Section 34 of the VAT Act. 3. In such circumstances referred to above, the writ applicants are here before this Court with the present writ application. SUBMISSIONS ON BEHALF OF THE WRIT APPLICANTS: 4. Mr. Parikh, the learned counsel appearing for the writ applicants vehemently submitted that the impugned order dated 18th March 2020 is ex-facie illegal. He would submit that in such circumstances, the action of demanding assessed dues vide Notification in form No.305 is also illegal. 5. The principal argument of Mr. Parikh is that the respondent No.2 failed to provide the copies of assessment orders including the order of cancellation of reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing an appeal against the impugned order under Section 73 of the Gujarat Value Added Tax Act, 2003 (for short, 'the Act, 2003'). In such circumstances, Ms. Shah would submit that this writ application may not be entertained and the writ applicants may be relegated to exhaust the alternative remedy available to them in law. 9. Ms. Shah further submitted that without prejudice to her preliminary objection as regards the maintainability of the present writ application even otherwise the writ applicants have no case on merits. Ms. Shah would submit that a reasonable opportunity of hearing was given to the writ applicants by the respondent No.2, and thereafter, the order came to be passed on 18th June 2020. Ms. Shah pointed out that all necessary information with regard to the vendors from whom the writ applicants purchased the goods had been furnished, and therefore, no prejudice could be said to have been caused to the writ applicants in the absence of such information. 10. Ms. Shah placed reliance on the following averments made in the affidavit-in-reply filed on behalf of the respondent No.2. We quote the relevant averments as under: 4. The petitioner in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. It is further submitted that before this Hon ble Court that on 18/03/2020 itself the authorized representative of the petitioner has stated that no additional documents are now required to be submitted by the petitioner and therefore no further hearing is contemplated in the assessment proceedings. Hence the respondent authority passed the assessment order on 18/03/2020 as the bearing on the assessment proceedings has already concluded on 8/03/2020. A copy of the order-sheet evidencing the said aspect is annexed hereto and marked Annexure A. 6. The next contention of the petitioner with regard to non-submission of the details of parties whose registration numbers were cancelled by the respondent authorities is also without any basis and contrary to the documents available on record. In this regard the attention this Hon ble Court is drawn to a communication dated 04/10/2019 addressed by respondent authorities to the petitioner wherein the name: of the parties whose registration numbers have been cancelled were already provided to the petitioner. In the said communication, it was informed to the petitioner that the Input Tax Credit as availed by the petitioner from the vendo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of the case of the Petitioner independently, on its own merits. In absence of pleadings of fraud in the notice and with specific and categorical averment made in the reply to the notice of the transactions made through the banking channels, coupled with the procurement of goods for transportation, receipts for payment of GST and selling of the very goods to the other parties, make us believe that the order passed by respondent No.2 is in breach of principles of natural justice. The individual merits on the basis of materials furnished are to be determined by the authority and not simply because the registration of M/S. Maa Oil Mills was cancelled ab initio. That being the case, we have chosen to entertain this writ-petition under Article 226 of the Constitution of India. 6.2 Here, apt would be to refer to the decision in VINOD ARVIND VS. INCOME TAX OFFICER , (2011) GLH 2255 , where, this Court has held that the writ-jurisdiction is essentially a discretionary jurisdiction. A writ may not be issued, just because it may be lawful to so do it. Further, merely because an alternative, efficacious remedy is available statutorily that would not mean that the writ jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Commercial Tax, Audit-1, Ahmedabad. Then, the petitioner dealer was served with the show-cause notice and was also called upon to show reason, as to why ITC claimed by the petitioner- assessee on the purchases alleged to have been made from M/s Lucky Enterprises may not be denied or cancelled. 15. In Shree Bhairav Metal Corporation (supra), this Court observed as under: 9.1 That the Assessing Officer allowed the ITC claimed by the petitioner dealer on the purchases made by the petitioner alleged to have been made from one M/s Lucky Enterprises. That in exercise of revisional jurisdiction, the first revisional authority disallowed the ITC of ₹ 6,49,561/- claimed by the petitioner dealer on the purchases made by it from one M/s Lucky Enterprises and the said order has been confirmed by the learned Tribunal. 9.2 From the order passed by the first revisional authority as well as from the impugned judgment and order passed by the learned Tribunal, it appears and it is not in dispute that the first revisional authority disallowed the ITC of ₹ 6,49,561/claimed by the petitioner dealer on the purchases alleged to have been made/purchased from M/s Lu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab initio from 22.2.2006 and the finding recorded by appropriate authority while cancelling the registration certificate of M/s Lucky Enterprises ab initio from 22.2.2006 that the transactions by M/s Lucky Enterprises are bogus and non-genuine. However, the petitioner dealer was not served with the copy of the order in the case of M/s Lucky Enterprises cancelling its registration certificate ab initio from 22.2.2006. 9.3 Now, so far as contention of the petitioner that the petitioner produced necessary documentary evidence such as bills, vouchers, weigh bills/slips and the payments were made by cheques and therefore, the first revisional authority ought not have disallowed the ITC is concerned, as such, it cannot be accepted. As held by Division Bench of this Court in case of Madhav Steel Corporation (supra) in which the Division Bench of this Court had also considered the decision in case of Giriraj Sales Corporation (supra), that while claiming ITC on the purchases made by a dealer, a dealer is also required to prove and establish the actual movement of goods and is required to prove the genuineness of the transaction and then and then only, the ITC can be allowed. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis has been placed on furnishing of the necessary and relevant documents to the party concerned in the form of assessment order including the order of cancellation of registration of the vendors. Although Ms. Shah, the learned Government Pleader tried her best to convince us that all necessary information was furnished to the writ applicants, yet we are not convinced with such a stance of the State. We take notice of many procedural lapses on the part of the respondent No.2 going to the root of the matter. There is no escape from the fact that the hearing for the purpose of imposing penalty under the Act, 2003 pursuant to the notice issued in that regard in Form No.309 was fixed on 24th March 2020. The notice in Form No.309 is dated 17th March 2020. However, it appears that when the representative of the writ applicants appeared before the respondent No.2 on 17th March 2020, a copy of the Form No.309 was served upon him and on the very next date i.e. 18th March 2020, the hearing was undertaken and the order also came to be passed on the very same date including the order of penalty. 17. To put it in other words, we are not convinced with the manner in which the proceedings hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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