Walchandnagar Industries Limited Vs Commercial Tax Officer (Andhra Pradesh)
The Hyderabad High Court observed that taxpayer could not appear for the hearing owing to prevalent pandemic situation and the department issued notices for penalty without hearing the petitioner. The High court opined that there is a failure of the rules of natural justice which entail a fair hearing.
The court said the order passed by Hon’ble Supreme Court of India is binding on all the citizens/Tribunals/Courts of this country, including those exercising Quasi Judicial functions.
Brief Facts of Judgement
- The petitioner was given notices for appearing before department, in response of notices, the petitioner requested to department for giving exemption from hearing since he did not have coordination with their offices, which were situated in other states, because of the prevalent pandemic COVID-19 and could not file reply.
- Further, the department refused all the requests for adjournment, and the impugned order and the penalty order were also passed without hearing the petitioner.
- The petitioner drew the attention of the court to the fact that the Hon’ble Supreme Court of India has extended the period of limitation in all matters and therefore, the apprehension of the respondents that unless a consequential order is passed, within three years from the date of original order, the same will not be valid, is not a correct interpretation.
- It was contended by department that writ petitioner should be rejected on account of that more than adequate opportunity was given and the petitioner failed to act on the same.
High Court Order
Post hearing the both parties, the court made the following observations
- The petitioner could not file detailed reply nor appear in person before department due to prevalent pandemic COVID-19 and sought time on the ground that they could not access all the records and to prepare their statement of objections.
- The impugned order was related to FY 2014-15 onwards and sufficient strength in the statement made that old records had to be accessed in order to prepare a detailed reply.
- The department’s understanding of law as declared by the Hon’ble Supreme Court of India is conspicuously misconceived.
- Finally, the court opined that the petitioner is entitled for reliefs.
High Court Directions
- Immediately after the restrictions are lifted on the movement of men and material, the department is directed to issue notice to petitioner giving two weeks time to appear along with reply and all his documents.
- The petitioner is directed to use the interim period to prepare his counter and his objections to the extent possible.
- Department is directed to give two weeks notice after the Central Government relaxes the lockdown in India, fix a suitable date for the appearance of petitioner and for disposal of matter. If petitioner seeks time or tries to delay the matter, department is at liberty to proceed strictly in accordance of law.
The High Court judgement can be seen as a relief to petitioners who could not appear or not able to make submissions to department owing to pandemic of COVID-19. The department should understand that the whole world is passing through a tough situation and should not give their inputs in creating challenges for taxpayers. Further, do not force taxpayers to knock the door of court on these minute matters.
Source: Walchandnagar Industries Limited Vs Commercial Tax Officer (Andhra Pradesh); WP 8425/2020 & 8451/2020; 11/05/2020