The Kerala High Court, while allowing an appeal has observed that non-consideration of a reply filed by the Assessee amounts to a violation of the principles of natural justice when the existence of such reply is within the knowledge of the Assessing Officer. (M/S Euro Business System v. the State of Kerala)
These observations were made by a division bench of Justice S.V Bhatti and Justice Murali Purushothaman while hearing a writ petition challenging an order of assessment issued by the State Tax Officer and the order of this court rejecting the rectification application.
The appellant, a dealer of printers, peripherals, and its parts, was issued a notice under the Kerala Value Added Tax Act. He appeared before the State Tax Officer and sought time to file his objections against the said notice. The appellant filed his reply well before the agreed-upon date. Shortly, he received an order of assessment from the State Tax Officer which stated that there was no reply to the notice which was issued to the appellant.
The appellant filed a writ petition challenging this order and alleged that the order had been dispatched 64 days before the issue of such order and that it had been pre-dated to show on record that the order was issued much before the filing of the record. He contended that the assessment would not be complete until the order is served on the assessee and the reply filed by the assessee is considered by the assessing officer.
The writ petition was dismissed by a Single Judge Bench of this court by stating that the error pointed out by the appellate was not self-evident and the question of consideration of the assessee’s reply is one which is to be decided by the statutory appellate authority.
Advocate Kurian Thomas appearing for the appellant argued that the order of assessment was impugned since it was filed without considering the assessee’s reply.
He also argued that the order of the Single Judge Bench failed to address the apparent error on the face of record as had been pointed out by the appellant.
Justice S.V Bhatti and Justice Murali Purushothaman after a thorough perusal of the copies of the order of assessment held that the order of assessment had been passed 64 days after the date of order after the receipt of the reply filed by the assessee and such non-consideration of reply of the assessee would amount to a violation of principles of natural justice.
“We find that the reply filed by the assessee was well within the knowledge of the second respondent before the order was issued for communication to the assessee. Non-consideration of the reply filed by the assessee, therefore, amounts to a violation of the principles of natural justice. Accordingly, the order is set aside", the Bench observed.
The Court directed the State Tax Officer to pass a fresh order after considering the reply given by the assessee within 8 weeks.