Case Law Details
Krishna Motors Vs Deputy Commissioner (Orissa High Court)
In a recent landmark decision, the Orissa High Court addressed a significant issue concerning tax assessments under the Finance Act, 1994. The court set aside an ex parte tax assessment order issued against Krishna Motors by the Assistant Commissioner of GST & Central Excise, Jharsuguda Division.
Background of the Case
The case revolved around an assessment order dated March 24, 2023, which was issued against Krishna Motors under Sections 73(2), 75, and 77(1)(c)(ii) of the Finance Act, 1994. This assessment, including interest and penalties for the tax period 2015-16, was issued ex parte, meaning that it was made without the presence or participation of the petitioner.
Key Issues
1. Failure to Serve Notice: The core issue in this case was the failure to serve a show cause notice (SCN) to Krishna Motors. The company had not received the notice, which led to their inability to file a reply or participate in the assessment proceedings.
2. Legal Precedent and Fairness: The petitioner argued that the lack of notice violated their right to a fair hearing. The court agreed, noting that an ex parte order without proper service of notice contravenes principles of natural justice and fairness in administrative proceedings.
Court’s Findings
The Orissa High Court, after reviewing the case, concluded that the ex parte assessment order could not stand. The court acknowledged that Krishna Motors was deprived of the opportunity to respond to the SCN and participate in the proceedings. The judgment highlighted the importance of procedural fairness and the right to be heard before adverse decisions are made.
Directions Issued
The court set aside the assessment order and provided specific directions for a fresh hearing:
1. Submission of Reply: Krishna Motors is required to file a reply to the SCN by July 19, 2024.
2. Reassessment Procedure: The Assistant Commissioner will take up the matter on July 22, 2024, and issue a fresh assessment order within two months thereafter.
This decision reinstates Krishna Motors’ opportunity to contest the tax liabilities and penalties imposed and ensures that the process adheres to legal standards of fairness.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
This matter is taken up by hybrid mode.
2. The challenge in the present writ petition is to an order dated 24.03.2023 of the Assistant Commissioner, GST & Central Excise, Jharsuguda Division, Jharsuguda (opposite party No.2) under Sections 73(2), 75 and 77(1)(c)(ii) of the Finance Act, 1994 along with interest and penalty for the tax period 2015-16.
3. A perusal of the impugned order reveals that it was passed ex parte. In fact, the petitioner was unable to appear and did not even file a reply to the show cause notice (SCN) issued to him preceding the above assessment order.
4. In the petition, the petitioner has explained how he was not served with any notice for which he was not able to file reply to the show cause notice.
5. Having heard learned counsel for the parties, this Court is of the view that the petitioner ought to be given one more chance to first reply to the SCN and then appear before the assessing authority for a fresh assessment order to be passed in accordance with law.
6. Accordingly, while setting aside the impugned assessment order dated 24.03.2023 of Opposite Party No.2, this Court directs as under:-
(i) The petitioner will first file a reply to the SCN on or before 19.07.2024.
(ii) The matter will thereafter be taken up by opposite party on 22.07.2024, and after hearing the petitioner, a fresh assessment order shall be passed within a period of two months thereafter. If aggrieved by such order, it will be open to the petitioner to seek appropriate remedies in accordance with law.
7. The writ petition is disposed of in the above terms.
Author Bio
