High Court Dismisses VAT Appeals, Holds No Violation of Natural Justice

In the said assessment, concealed sales of Rs. 22,57,252/- were found with corresponding tax liability of Rs. 1,61,823/-, and concealed purchases of Rs. 19,03,779/– were recorded, attracting entry tax of Rs. 24,730/-. It was urged before the High Court that the assessment orders were vitiated on account of reliance upon scrutiny reports which were not supplied to the appellant, and that the additions were made without affording a proper chance of rebuttal. It was further urged that the earlier appeals were dismissed mechanically without considering the grounds on merits, thereby resulting in a violation of the principles of natural justice.

The respondent opposed the appeals by contending that there was no breach of natural justice as multiple opportunities had been granted both during assessment as well as in the appellate stages. The record disclosed that repeated notices were issued, adjournments were granted, yet no replies or documentary evidence were furnished by the appellant. It was therefore submitted that the grievance raised was without substance. The High Court considered the rival contentions and examined whether the case disclosed a denial of opportunity or whether the conduct on record reflected failure to avail the opportunities that were provided, and further whether any substantial question of law arose out of the order of the Board.

Issue Before Court: Whether the assessment and appellate orders suffered from violation of the principles of natural justice or whether sufficient opportunity had already been provided but not availed by the appellant.

Court’s Decision: According to the Court, there was no breach of natural justice in the case because the appellant was given successive opportunities at various stages of the proceedings but failed to utilize them. The record showed that the Assessing Officer had sent notices and given sufficient time, but no response or documents in support were filed. Even before the First Appellate Authority and the Board, adjournments were given but the appellant did not file any supporting material in favor of its case. . In these circumstances, the contention regarding denial of opportunity and non-supply of scrutiny reports was held to be untenable. The Court emphasized that when opportunities are granted and not utilised, a plea of violation of natural justice cannot be entertained.

The Bench also took note of the figures involved, namely concealed sales of Rs.22,57,252/- with tax liability of Rs.1,61,823/- and concealed purchases of Rs. 19,03,779/- with entry tax liability of Rs. 24,730/-. Both the authorities below had concurrently upheld the assessments and dismissed the appeals. The High Court observed that no perversity or illegality was shown in the concurrent findings and no substantial question of law arose for consideration under Section 53 of the VAT Act. Therefore, the Court affirmed the orders of the authorities below and dismissed both the appeals in their entirety.

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