No Question of Violation of Principals of Natural Justice when Petitioner Fails to respond even after Four or Five Adjournment

The Kerala High Court in the matter of M/S.KARVY INNOTECH LTD Vs. DEPUTY COMMISSIONER has ruled out that no question of violation of principals of natural justice when petitioner fails to respond even after four or five adjournment.

The Petitioner, M/S.KARVY INNOTECH LTD is a public limited company engaged in the business of various IT related services. For the assessment year 2016-17, it had filed its annual return on 31.05.2017. Thereafter, a notice dated 10.04.2018 issued under section 25(1) of the KVAT Act was served on the petitioner, alleging various irregularities. A reply notice was filed by the petitioner on 08.05.2018. The total escaped turnover proposed by the assessing officer as per notice dated 10.4.2018 was Rs.6,95,10,864/-. Petitioner pleads that subsequent to the reply to the notice dated 10.04.2018, no communication was received thereafter and that they assumed the matter to have been closed. However, Ext.P5 notice dated 05.01.2021 was received by the petitioner for the same assessment year, issued under section 25(1) of the KVAT Act, wherein, the total escaped turnover was proposed to be Rs.29,32,47,628/-.

The learned counsel for the petitioner submitted that petitioner is subjected to great prejudice since sufficient opportunity was not granted. It was also argued that the entire affairs of the petitioner, especially those relating to the taxation matters were being handled by the corporate office of the petitioner at Uttar Pradesh and due to the surge in Covid cases, there were difficulties for the petitioner to collate the data for replying to the notices issued by the respondent, which was the reason why the adjournments were sought for. Learned counsel further submitted that no prejudice would be caused to the Revenue if an opportunity is granted afresh.

The Bench found out that by Ext.P7, petitioner had sought only for two week’s time. By Ext.P9 he had only sought for one more week’s time and by Ext.P10 he sought for a further two weeks time. Thus practically every request for adjournment was granted with a specific rider that ‘no further adjournment will be given’. In spite of the above, further opportunities were granted to the petitioner, but he failed to avail the same. Admittedly, as evident from the impugned assessment order, even on 01.03.2021, petitioner had failed to file any objection and even failed to appear for a hearing. As a result of the failure of the petitioner to appear for the hearings as well as the failure to file any objection, the respondent could not have done anything other than issuing an order of assessment, as proposed in the notice. It is in the above circumstances that Ext.P11 came to be issued.

The Coram rule out that, “On a consideration of the sequence of events that culminated in Ext.P11 assessment order, I am of the considered view that petitioner was granted sufficient opportunity to contest the assessment proceedings and his failure to do so cannot be regarded as a violation of the principles of natural justice to invoke the discretionary jurisdiction of this Court under Article 226 of the Constitution. Hence, the writ petition stands dismissed. However, the liberty of the petitioner to pursue his statutory remedies shall not be affected by this judgment and if any such remedy is invoked, the same shall be considered in accordance with law.”

The Judgment made by Honourable Mr. Justice Bechu Kurian Thomas.

The Petitioner represented by Mr.Abhishek Vaishya and Respondent represented by Dr.Thushara James.

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