Allowed

M/s. Akzo Nobel India Limited v. Commercial Tax Officer

Telangana HC19 Apr 2021WP/9736/2021

Case brief

AI extract

What is this about?

The High Court allowed a writ petition challenging an assessment order passed under the Central Sales Tax Act. The court held that the order violated principles of natural justice as the assessing officer did not retrieve prior filings and denied a personal hearing, remitting the matter for fresh consideration.

What did the court decide?

The impugned Assessment Order is set aside. The respondent is directed to serve a show cause notice, allow objections, conduct a personal hearing, and pass a reasoned order.

M/s. Akzo Nobel India Limited Vs… — Constitutional and Fundamental Rights | Telangana HC (2021)

¶1

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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MONDAY, THE NINETEENTH DAY OF,APRIL rWO THOUSAND AND TWENTY ONE^-

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PRESENT

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THE HON,BLE SRt JUSTTC-Elvl. S. RAMACHANDRA RAO

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THE HON'BLE SNIJTHrcC T. VINOD KUMAR

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Between:

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WR|T^pETtTtON NO: 9736 OF 2021

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M/s. Akzo Nobel lndia Limited, r.eq. b.y its Depot Manager. Mr, S. Anurooo Narsapur X Roads. Batanasar, Hyoe?nJa'-srios7, i;t'.'gZ;r'5i"tJl " ^"-"',

¶9

AND

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1 . Commercial Tax Officer, Madhapur- lV Circle, Hvderabad.

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Assistant Commissioner (CT) LTU, Hyderabdd^(urat Divis ion, Hyderabad. 3. Commercral Tax Officer, Balanagar Circle, Hyderabad.

¶12

State of Telangana, rep. by its Principal Secretary to Gove rnment. Revenue (CTll) Department, Secretariat, Hyderabad.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia^praying that in the circumstances stated in the affidavit filed therewith, the High Court may be^pleased to issue a Writ of Certiorari or any other appropriate writ or order or direction^quashing the impugned order of the Respondent^{passed in AO No.45549 dated31 .3.2020for} the assessment^year 2O16-17 under the^{Central Sales Tax Act,1956, as being illegal,} arbitrary. high handed and^{in violation of principlesof naturaljustice, andwithout} authority of law and^{jurisdiction direct the Respondentto re-assess the Petitionerfor} the year 2016-17 under^{the csT Act, after giving proper show cause notice in} accordance with Rule^{64 of the TelanganaVAT Rules.2005 after consideringthe} turnovers in the returns^{and the declarationstiled alreadyand an opportunityto tile} objections and a^{personal hearing and thereafter,}

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lA NO: 1 OF 2021

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Petition under Section^{151CPC prayingthat in the circumstances stated in the} affidavitfiledinsupportofthepetition,theHighCoUrtmaybepleasedtograntStayof recovery of the^{disputed demandof Rs 130,17,01,6811 pursuantto the impugned} order of the 1st^{Respondentdated 31.3.2021 for the assessment year2016- 17 under} theCsTAct,lg56,pendingdisposaloftheWritPetitionasotheruuisethePetitioner will be put to severe^{loss and hardship'}

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Counsel for the^{Petitioner:SRI S' DWARAKANATH}

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Counsel for Respondents:^{SRISAI KRISHNA,AGP FOR} THE ADVOCATE GENERAL

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The Court made^{the following:ORDER}

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HONOURABLE^{SRI JUSTICE M'S'RAMACHANDRA RAO} AND HONOURABLE^{SRI JUSTICET'VINOD KUMAR}

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T PETIT^{ION No.9136 of 2021}

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ORDER:^{(Per I{on'bleSri JusticeM'S' Ramachandra Rao)}

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This Writ^{Petitionis filed challengingthe AssessmentOrder AO} No.45549^{dt.3l-03-2l21passedby 1't respondent under the CentralSales} Tax Act 1956^{(for short 'the Act') for the periodApril' 2016 to March'} 2017.

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According to the^{petitioner, it was originally on the rolls of the} 2nd respondent and was filing^{monthlyretums beforehimunder the Act'}

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Petitioner contends that it had filed 'F'^{and 'C' forms through} letters dt.07-08-2017, 02-12-201'7 and 05-03-2018^{before the} 2nd respondent's offi ce.

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Later, petitioner's file was transferred from 2nd respondent to 1't respondent.

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On 04-06-2019, a show cause notice was issued by l't respondent proposing to assess the petitioner under the Act for the above period.

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Petitioner contends that petitioner did not receive any reminder notice dt.0i-02-2021 ancl no oppoftunity was provided for the petitioner for a personal hearing, and the impugned Assessment Order was passed on 31-03-2020 by l't respondent ignoring the 'C' and 'F' declaration forms fi1ed by petitioner on 07-08-2017,02-12-2017 and 05-03-2018 before the 2'd respondent.

¶29

7 . Learned counsel for petitioner contends that it was incumbent on the part of I't respondent, to whom^jurisdiction to make the impugned assessment was transferred^{from 2nd respondent,to get the record from} the 2nd respondent, to^{look into it, and then passthe Assessment Order,} and the l't respondent^{alsoought to have provided a personal hearing to} the petitioner,^{whichhas not been done.}

¶30

Petitioner also^{refers to Ex.P-7 letter dt'08-04-2021 filed by} petitioner before^{the 1't respondentmentioning about 'C' and 'F' forms} aiready fiied^{by petitioner previously and requestinghim to redothe} assessment^{by taking intoaccountthis material'}

¶31

g. Sri Sai^{Krishna, ieamed AssistantGovemmentPleader attachedto} the Office^{of the learned Advocate General appearing for respondents} states^{that 1't respondentdid not call for the record from2nd respondent'} and could^{not notice this material which the petitionerhad filed' and did} not consider^{the same whiie passingthe AssessmentOrder'}

¶32

10.^{He contendsthat the reminder noticedt'01-02-2021has been} seled^{on pgtitioner'but he does not dispute that personal hearingwas} not afforded^{to the Petitloner'}

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11.^{During the period from March' 2020 til1 December' 2020' this} Bench^{had to notice severalAssessmentOrders being passed by the} Assessing^{Officers under the Act for the period 2015-i6 after} 22-03-2020,^{the day when lockdown was imposedby the State} Govemment^{and Central Government on accountof Covid-19pandemic'} numbering^{to morethan 200' where(a) show cause notices havenot} been^{served,(b) reminder notices were not issued' (c) personal hearing}

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::3::

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was not^{afforded, and (d) even in caseswhere showcauses noticewere} seNed and^{explanation has been furnished,such explanationsand} documents^{filedalong with explanations' were not considered'All these} Assessment^{Orders had been set aside and the matters wereremitted to} the respective^{Assessing Off,rcers'}

¶36

It was^{pointedout to the leamed Special Counsel appearingfor} Commercial^{Taxes in those cases that this sort ol disposalby the} Assessing Officers, in violation of^{principles of naturaljustice is} shocking. Some of this Court's orders were also^directed to^be communicated by the Bench to the Commissioner of Commercial Taxes, Govemment of Telangana.

¶37

In spite of these events, we are distressed that history is repeating itself, and we are again starting to see Assessment Orders being passed by the Assessing Officers in violation of principles of natural justice without considering the material which is already filed with the Department.

¶38

In these frcts and circumstances of the case, we record our dissatisfaction with the manner in which the commissioner of Commercial Taxes and the Officials working under him/her are discharging their duties to the detriment of all the Assessees and compelling several assessees to run to the High Courl to set right the injustice caused to them on account of non_compliance with the principles of natural justice by the respective Assessing Officers.

¶39

l5' Therefore, the writ petition is allowed; the impugned Assessment Order A.O.No.45549 dt.3l-03-2021 passed by 1't respondent is set aside

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::1::

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on the ground of violation of principles of natural justice and non_ consideration of material fired by petitioner on 0z-o.-2017, 02-12-?017 and 05-03-2018 before the 2nd respondent; matter is remitted to the l't respondent for fresh consideration; the i't respondent is directed to serve show cause notice under Rule 64(lxb) of the Telangana VAT Rules on petitioner indicating the tumover proposed to be assessed and the tax proposed to be levied thereon; petitioner is granted six (06) weeks time from the date ofreoeipt ofsuch show cause notice to file objections hereto along with supporling material; a personal hearing shall afforded to the petitioner by l't respondent; and 1't respondent shall then^passa reasoned order in accordance with law^{and communicate it to the} petitioner.

¶42

The 4th respondent^{shall pay costs of Rs.25,000/- (Rupees T'wenty} Five Thousand only)^{to the petitioner,which shall be recoveredfromthe} salary of the l.t^{respondent, and disciplinary action shall be initiated} against I't respondent^{for non-considerationof material filed by petitioner} before passing^{the impugnedAssessmentOrderon 3l-03-2021'}

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Consequently,^{miscellaneouspetitions, pendingif any' shallstand}

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c Iosed.

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MEMORANDUM^{OF COSTS}

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w.P.NO.9736^{0F 2021} Rs. Ps.

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Costs Quantified^{by Hon'bleCoud (That the} ;'x;;r;;;;;i h"rl'in is^{directed to pav costs} nf is.25.000/-^{(Rupees lwenly rrve} il"r;;".;'-o;v)^{td tre Petitioner hererin'} ')rr,iJr.rinirr the 1st resPondent^{Ie'iecoreteo herein'from the salary of}

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TOTAL

¶49

25,000-00

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SD/- B.SATY^AVATHI ASSISTANT^REGIS R

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//TRUE^COPY//

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SECTION^OFFICER

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to'',. ,nu commissioner of Commercial Taxes' State of Telangana' Hyderabad'

brl

' \

2 The Commeidial-Tii'Officer,^{Madhapu r- lV Circle. Hyderabad.} 3 The Assistant Commissioner^{(CT) LTU, Hyderabad Rural Division.Hyderabad.}

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4 The Commercial Tax Officer, Balanagar^{Circle,Hyderabad.}

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5 The Principal Secretary to Government,^{State of Telangana Revenue (CT-ll)} Department. Secretariat, Hyderabad.

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6 One CC to Sri S. Dwarakanath,Advocate IOPUCI

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7 Two CCs to the Advocate Gerieral, High Court for the State of Telangana. [OUT] 8 Two CCs to GP For Commerclal Taxes, High Court for the State of Telangana. tourl

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¶63

Two CD Copies

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IVBC

+,-

HIGH COURT.,

DATED:^1910412021

1 tl c s TA /d:
o
0 2 j'jll 2021
..',;"
ORDER

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WP,No.9736 of 2021

¶73

ALLOWING * THE WRIT PETITION

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WITH COSTS.

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Vl,, d\

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l. t^g ,ut ll-!tt t tgr (Jt \rvr t l| I rsr vrqr

M/s. Akzo Nobel India Limited v. Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

M/s. Akzo Nobel India Limited v. Commercial Tax Officer

Case brief

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