TMI Blog2021 (3) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... -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 reflect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - WP(C)/3056/2017 - - - Dated:- 26-2-2021 - HONOURABLE MR. JUSTICE SOUMITRA SAIKIA Advocate for the Petitioner: MS.N GOGOI Advocate for the Respondent : None JUDGMENT ORDER(CAV) 1. WP(C)/3056/2017 has been filed by the petitioner-company assailing the assessment order dated 20-07-2013 passed by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give effect to the Policy of 2008, a Scheme, namely, the Assam Industries (Tax Remission) Scheme, 2009 (hereinafter referred to as the Scheme of 2009) was published vide Notification No. FTX.66/2009/2 dated 03.11.2009. 3. Being bolstered by the exemptions announced in the Industrial Policy of Assam, 2008 by the Government of Assam, the petitioner-company established its factory at N.H.39, near CRPF Group Centre, Khatkhati, Assam in the district of Karbi Anglong for manufacturing of MS Ingots and TMT Bars. 4. The petitioner-company being a new unit with State of Assam, applied for and was granted an Eligibility Certificate as well as a Certificate of Entitlement for claiming incentives and exemptions under the Policy of 2008 and the Scheme of 2009 respectively. The Eligibility Certificate and the Certificate of Entitlement was granted to the petitioner on 26.08.2013 and 25.10.2013 respectively. 5. For the assessment year 2010-11, the petitioner submitted its annual returns. It is contended that the returns filed were duly accompanied by the audited balance sheet for the assessment year 2010-11. It is contended that the petitioner s case was selected for Audit Assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order dated 20.07.2013 and the consequential demand raised vide Demand Notice dated 30.07.2013 ought not to have been passed by the Department that too without affording adequate opportunity to the petitioner to present the copies of the Eligibility Certificate and the Certificate of Entitlement is arbitrary. Such high handedness of the respondent authority is illegal and contrary to the provisions of the AVAT Act, 2003, the Policy of 2008 and the Scheme of 2009 and, therefore, the same should be interfered with, set aside and quashed. 7. The further case of the petitioner is that although a Notice dated 21.04.2012 was issued under the provisions of Section 36 of the AVAT Act, however, the impugned order was passed under Section 37 of the AVAT Act, 2003. As no Notice as required under section 37 of the AVAT Act 2003 and/or under the provisions of Central Excise Act, was served upon the petitioner adequate opportunity was denied to the petitioner to represent its case before the departmental authority before impugned order was passed. As such the same being in violation of the Principles of Natural Justice, the impugned order and the consequently demands raised is ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Justice and in support of his contentions relies upon the Judgment of the Supreme Court in the case of Dharampal Satyapal Limited -Vs- Deputy Commissioner of Central Excise, Guwahati and Ors. reported in (2015) 8 SCC 519. 10. I have heard the learned counsels for the parties and have also perused the pleadings available on record. The primary grievance of the petitioner is that the petitioner had applied for and was granted Eligibility Certificate dated 26-08-2013 by the Assam Industrial Development Corporation under which the petitioner was entitled for claiming incentives under the Industrial Policy of Assam 2008 and for claiming exemption of tax under the Assam Industries (Tax Exemption) Scheme 2009. The incentives approved are VAT Exemption with effect from 12-07-2010 to 11-07-2017 (07 years) subject to maximum of 100% of fixed capital investment i.e. ₹ 9,89,04,734/- (Rupees Nine Crore Eighty Nine Lakhs four Thousand Seven Hundred Thirty Four) only and power subsidy with effect from 12-07-2010 to 11-07-2015 for five (five) years. The petitioner was also granted entitlement certificate dated 25-10-2013 by the Commissioner of Taxes whereby the petitioner was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the said assessment order dated 20-07-2013 and demand notice dated 30-07-2013 have been assailed in the present proceeding. Pursuant to the issuance of the impugned order dated 20-07-2013, the petitioner by communication dated 28-01-2014 represented before the respected authority requesting for passing an order for reassessment of their tax liability, which however, had remained un-disposed. The petitioner also filed returns under Central Sales Tax 1956. Both the cases were pending before the same authority and were taken up for hearing on the same dates. Although Notices dated 21-04-2012 and 16-11-2012 were issued by the Department in respect of the assessments under AVAT Act, since both the proceedings were taken up by the same authority and against the same petitioner, no separate Notice was issued in respect of Assessments under Central Sales Tax. 12. The short case projected by the petitioner is that the assessments completed by the department under section 37 of the AVAT Act, 2003 is hit by the Principle of violation of Natural Justice inasmuch as, the Notice contemplated under section 37 prior to completion of the Best Judgment assessment by the Assessing Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 Taxation Authorities designated under the provisions of the AVAT Act, are required to statutorily perform their duties prescribed. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proposition, however in the facts of the present case it is seen from the pleadings that prior to the order of assessment being passed which is impugned in the writ petition i.e. WP(C)/2007/2013, the exemption certificates were admittedly not received by the writ petitioner. Therefore, it cannot be said that the question of exemption could have been decided prior to assessment order being passed inasmuch as, it was the duty of the petitioner to respond to the Notice issued by the Department and adequately address upon the question of exemptions granted to it before the Departmental Authorities. From the facts pleaded as it is seen that as the petitioner did respond to the Notice received, the Audit Assessment were completed by the Department by taking recourse to Best Judgment Assessment under section 37 of the Act. 17. In the case of Dwijendra Kumar Bhattacharjee vs- Superintendent of Taxes, this Court held that opportunity given to the assessing to be heard must be real and reasonable. This Court in the said case held that when the assessee seeks sometime stating difficulties, his prayer should be considered judiciously. As it might not be possible for assessee to subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the record or any arithmetical mistake, assessment can be reopened. However, in the facts of the present proceedings this judgment will not come to the aid of the petitioner. As discussed above, the entire challenge in the present proceeding is to the impugned order dated 20-07-2013 passed by the Assessing Officer under section 37 of the AVAT Act, 2003 solely on the ground of violation of the Principles of Natural Justice. No other grounds have been urged to assail the correctness of the impugned order passed. Nor is the Audit Assessment Proceedings initiated by the Department under challenge. The case projected by the petitioner is not where assessments completed were sought to be responded, rather the Audit Assessments initiated were completed by resorting to Best Judgment assessment. The assessment order has been assailed on the ground of the same being violative of the Principles of Natural Justice as the Best Judgement assessment were completed by non-issuance of prior Notice to the petitioner. 21. The learned state counsel has pressed into service the judgment of the Apex Court rendered in the case of Dharampal Satyapal Limited -vs- Deputy Commissioner of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post-decisional hearing is held to be permissible. Further, the courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on. 39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasising that the principles of natural justice cannot be applied in straitjacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason-perhaps because the evidence against the individual is thought to be utterly compelling-it is felt that a fair hearing would make no difference -meaning that a hearing would not change the ultimate conclusion reached by the decision-maker-then n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyee if he has not already secured it before coming to the court/tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the court/tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the court/tribunal should not interfere with the order of punishment. The court/tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the courts/tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the court/tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. 22. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways 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. When this principle laid down by the Apex Court are applied to the facts of the present proceedings, it is seen that the petitioner does not dispute the issuance of and receipt of Notices by the Department in respect of Audit Assessments which had commenced. 24. There is also no dispute that under the scheme of AVAT Act 2003, under any of the conditions mentioned under section 37, the Departmental Authority may proceed for completing the assessment as per its Best Judgement . The Certificate of Exemption dated 26-08-2013 and Certificate of Entitlement dated 25.10.2013 were not available with the petitioner during the continuance of assessment proceeding. This fact is also not disputed by the petitioner. It is also not disputed that the petitioner did not file any petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that there is no dispute at the Bar that the petitioner for the relevant period of time was issued Eligibility Certificate and Certificate of Entitlement, and the same, if produced before the Department, could have been adequately taken note of during the audit assessment proceedings, this Court is of the view that ends of justice will be met, if the matter is remanded back to the department. 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. 27. The entire exercise will be completed within a period of 4(four) weeks from today. Till such orders are passed by the Department as indicated above and duly communicated to the petitioner, the interim order passed on 24.05.2017 directing no coercive action to be taken in terms of the impugned order dated 20.07.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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