Dated This The 10[Th] Day Of July, 2023 v. Commissionerof Income Tax [Air 2001 Sc 1391

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN MONDAY, THE 10 DAY OF JULY 2023 / 19TH ASHADHA, 1945WP(C) NO. 15836 OF 2017 PETITIONER: M/S.BPL LTD.BPL WORKS, KOOTTUPATHA, PALAKKAD-679335,REPRESENTDBY ITS CHIEF FINANCIAL OFFICER,MR.GANESH S.V.BY ADVS.SRI.M.GOPIKRISHNAN NAMBIARSRI.P.GOPINATHSRI.K.JOHN MATHAISRI.JOSON MANAVALANSRI.KURYAN THOMASSRI.PAULOSE C. ABRAHAMSRI.RAJA KANNAN RESPONDENTS: 1STATE OF KERALAREPRESENTED BY ITS SECRETARY TO GOVERNMENT,TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM 695001.2THE ASSISTANT COMMISISONERDEPARTMENT OF COMMERCIAL TAXES, SPECIAL CIRCLE,PALAKKAD-678001.BY ADVS.GOVERNMENT PLEADERGOVERNMENT PLEADER OTHER PRESENT:SMT.RESMITHA R CHANDRAN-GP THIS WRIT PETITION (CIVIL) HAVING COME UP FORADMISSION ON 14.06.2023, THE COURT ON 10.07.2023 DELIVEREDTHE FOLLOWING: ANU SIVARAMAN, J. = = = = = = = = = = = = = = = W.P.(c).No.15836 of 2017 = = = = = = = = = = = = = = = = Dated this the 10[th] day of July, 2023 JUDGMENT 1. This writ petition is filed challenging Exhibit P7 orderrequiring the payment of Rs.4,43,24,243/- as tax andinterest. It is contended that Exhibit P7 order was passedwithout granting the assessee an opportunity of personalhearing and without considering the contentions. The 2[nd]respondent had originally completed the best judgmentassessment by Exhibit P1 order dated 28.5.2016. The taxasessed was remitted. However, on 7.12.2016, a proposalwas mooted to reopen the assessment on the ground thatthere was difference in the turnover of local purchase asshown in the annual return and audit statement. ExhibitP2 notice was therefore issued on 7.12.2016. It issubmitted that since the operations of the Palakkad unitwas stopped till August 2013, the petitioner had soughtadjournment by Exhibit P3 letter dated 2.1.2017. The hearing was adjourned to 16.2.2017. The petitioner soughtfurther adjournment till 28.2.2017 by Exhibit P5. A replywas also submitted on 22.2.2017. However, without anyfinal hearing, an order of assessment was passed on6.3.2017, as evidenced by Exhibit P7. The learned counselfor the petitioner submits that the confirmation of theproposal without hearing the petitioner was bad in law.The learned counsel would place reliance of the decisionsof the Apex Court in Tin Box Company v. Commissionerof Income Tax . 2. A counter affidavit has been placed on record by the 2[nd]respondent stating that assessment for the year 2011-2012was originally completed based on three vehicle checkingfiles by Exhibit P1. Subsequently, two other vehiclechecking cases were received and in order to utilise thesepenalty cases, assessment was reopened under Section25(1) of the KVAT Act, 2003. Annual return, auditedstatement and KVATIS were verified and manyirregularities were noticed and Exhibit P2 pre-assessmentrespondent stating that assessment for the year 2011-2012was originally completed based on three vehicle checkingfiles by Exhibit P1. Subsequently, two other vehiclechecking cases were received and in order to utilise thesepenalty cases, assessment was reopened under Section25(1) of the KVAT Act, 2003. Annual return, auditedstatement and KVATIS were verified and manyirregularities were noticed and Exhibit P2 pre-assessment notice was issued 7.12.2016. Thereafter, the petitionersought an adjournment for collecting the details. It issubmitted that Sri.Dinesh Shenoy M, Senior ManagerAccounts had appeared before the 2[nd] respondent forpersonal hearing on 15.2.2017 and on 28.2.2017 anddiscussed the facts and had sought time upto 5.3.2017 toproduce records. It had been specifically informed that nofurther time would be granted. Exhibit R2(a) is producedin evidence of the fact that there was appearance for thepetitioner in the hearing. However, no further documentswere produced and the assessment was finalised on6.3.2017. 3. The learned Government Pleader also placed reliance on the decision of the Apex Court in Genpact India Pvt.Limited v. Deputy Commissioner of Income Taxand another [2019 KHC 7167] to contend that theassessment order admittedly being an appealable order,the petitioner ought to have filed an appeal and that theadmitting of the writ petition and the pendency with an interim order cannot lead to the conclusion that the writpetition cannot be dismissed on the ground ofmaintainability once such a ground is raised. 4. Having considered the contentions advanced, I notice thatthe assessment was completed by Exhibit P1 dated28.5.2016. Thereafter, Exhibit P2 pre-assessment noticewas issued on 17.12.2016 giving the petitioner anopportunity of personal hearing. The petitioner hadsubmitted a request seeking an opportunity of hearing withall relevant records. The request was admittedly receivedby the respondent on 1.3.2017. However, without grantingthe same, the assessment had been finalised on 6.3.2017.The petitioner had sought time for producing records,however, Exhibit P7 was passed on 6.3.2017 confirming theproposal in Exhibit P2 notice. I notice that Section 25(1) ofthe KVAT Act specifically provides for a reasonableopportunity being granted to the assessee. In the instantcase, it is admitted that an opportunity of hearing was notafforded to the petitioner. In the above view of the matter, I am of the opinion that the contention of the petitionerthat the petitioner should now be relegated to the appellatetribunal cannot be accepted. 5. In the above view of the matter, Exhibit P7 is set aside.There will be a direction to the respondent to finalise theassessment after granting a further opportunity of personalhearing to the petitioner. Appropriate notice shall beissued for personal hearing within three weeks from thedate of receipt of a copy of this judgment and theassessment shall be finalised after hearing the petitionerand after considering the objections within a period of twomonths thereafter. There will be a direction to the respondent to finalise theassessment after granting a further opportunity of personalhearing to the petitioner. Appropriate notice shall beissued for personal hearing within three weeks from thedate of receipt of a copy of this judgment and theassessment shall be finalised after hearing the petitionerand after considering the objections within a period of twomonths thereafter. The writ petition is ordered accordingly. sd/- Anu Sivaraman, Judge PETITIONER EXHIBITS EXHIBIT P1: THE TRUE COPY OF THE ORDER DATED 28.5.2016 FOR THE YEAR 2011-123 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25 OF THE ACT. EXHIBIT P2: THE TRUE COPY OF THE NOTICE DATED 7.12.2016 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25(1) OFTHE ACT.7.12.2016 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25(1) OFTHE ACT. EXHIBIT P3: THE TRUE COPY OF THE LETTER DATED 2.1.2017 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4: THE TRUE COPY OF THE INTIMATION DATED 4.2.2017 ISSUED BY THE 2ND RESPONDENT THROUGH E-MAIL TO THE PETITIONER. EXHIBIT P5: The writ petition is ordered accordingly. sd/- Anu Sivaraman, Judge PETITIONER EXHIBITS EXHIBIT P1: THE TRUE COPY OF THE ORDER DATED 28.5.2016 FOR THE YEAR 2011-123 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25 OF THE ACT. EXHIBIT P2: THE TRUE COPY OF THE NOTICE DATED 7.12.2016 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25(1) OFTHE ACT.7.12.2016 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER UNDER SECTION 25(1) OFTHE ACT. EXHIBIT P3: THE TRUE COPY OF THE LETTER DATED 2.1.2017 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4: THE TRUE COPY OF THE INTIMATION DATED 4.2.2017 ISSUED BY THE 2ND RESPONDENT THROUGH E-MAIL TO THE PETITIONER. EXHIBIT P5: THE TRUE COPY OF THE INTIMATION DATED 15.2.2017 ISSUED BY THE 2ND RESPONDENT THROUGH E-MAIL TO THE PETITIONER.15.2.2017 ISSUED BY THE 2ND RESPONDENT THROUGH E-MAIL TO THE PETITIONER. EXHIBIT P6:THE TRUE COPY OF THE REPLY DATED 22.2.2017 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.22.2.2017 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P7: THE TRUE COPY OF THE ORDER OF ASSESSMENTDATED 6.3.2017 FOR THE YEAR 2011-12 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.DATED 6.3.2017 FOR THE YEAR 2011-12 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. True copy PS to Judge