Telangana High Court
M/S Arani Agra Oil Industries Private ... vs The Commercial Tax Officer on 16 December, 2020
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T.AMARNATH GOUD
WRIT PETITION NO.21785 OF 2020
O R D E R:
(Per Sri Justice M.S.Ramachandra Rao) In this Writ Petition, the petitioner assails the Assessment Order No.52923 dt.31.03.2020 passed by the 1st respondent under the CST Act, 1956 for the period April, 2015 to March, 2016.
2. According to the petitioner, due to commercial reasons, the petitioner stopped its operations from July, 2016 and continued to file nil returns up to 2017 and thereafter on 27.07.2017 it applied for cancellation of registration due to closure of its business in Telangana.
3. The petitioner states that the 4th respondent, who is the banker of the petitioner, informed it that it had received a demand notice on 21.10.2020 for payment of Rs.2,84,37,800/- from the respondents mentioning about the impugned Assessment Order.
4. It is contended that the 1st respondent had not served a pre- assessment show-cause notice on the petitioner before passing the impugned order and that the petitioner had also not been provided any opportunity of personal hearing.
5. The petitioner also pleaded that the 1st respondent did not provide any basis as to how the Commercial Tax Department had arrived at the figures, and the amounts mentioned in the Assessment Order cannot be treated as sales turnover.
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6. It is alleged that the 1st respondent had wrongly treated the value of goods received from the petitioner's plant located in Andhra Pradesh (Inward Branch Transfer) as inter-State sales and levied tax which is impermissible in law because there is no element of sale in this turnover at all and therefore no tax can be demanded from the petitioner by the 1st respondent.
7. The petitioner also contended that the petitioner was supplied with an unsigned copy of the impugned order only on 24.11.2020.
8. Sri J.Anil Kumar, learned Special Counsel for Commercial Taxes appearing for the respondents does not dispute that the impugned Assessment Order was passed without serving any prior show-cause notice on the petitioner and without providing any personal hearing to the petitioner.
9. Therefore, there has been a clear violation of principles of natural justice which has caused serious prejudice to the petitioner.
10. Therefore, the Writ Petition is allowed; the impugned Assessment Order No.52923 dt.31.03.2020 passed by the 1st respondent for the year 2015-16 under CST Act, 1956 is set aside; the matter is remitted back to the 1st respondent for fresh consideration; the demand notice dt.21.10.2020 issued to the petitioner's banker, i.e., the 4th respondent is also set aside; the 1st respondent is directed to serve a show-cause notice on the petitioner in accordance with Rule 64 of the TVAT Rules indicating the turnover proposed to be taxed and also the tax proposed to be levied on the petitioner; the petitioner is granted six (6) weeks time 3 from the date of receipt of the said show-cause notice to file objections along with supporting material; a personal hearing shall be provided to the petitioner by the 1st respondent; and then a reasoned order shall be passed by the 1st respondent in accordance with law and communicated to the petitioner. No costs.
11. Pending miscellaneous petitions, if any, in this Writ Petition shall stand closed.
____________________________ M.S.RAMACHANDRA RAO, J _______________________ T.AMARNATH GOUD, J Date: 16-12-2020 Svv