Common Order:(M.S. Ramachandra Rao, J.)
1. In these Writ Petitions filed by the same petitioner, Assessment Order Nos.37895, 37914, 37859 and 37934 all dt.27.03.2020 passed by the 1st respondent for Assessment Years 2015-16, 2016-17, 2014-15 and 2017-18 are assailed.
2. The petitioner is a registered dealer on the rolls of the 1st respondent under the provisions of the Telangana VAT Act, 2005 and operates as a sole proprietary concern, a Hotel in Nizamabad District in the State of Telangana.
3. The petitioner contends that for all these Assessment Years it was discharging VAT liability under Section 4(9)(c) of the Act at the rate of 14.5% on the turnover relating to sale of food, and though the petitioner is also selling alcohol (in loose form), petitioner is not liable to pay VAT as the liability was already discharged at the time of the first sale by the Telangana Beverages Corporation Limited and the sale of loose liquor is not taxable as per Explanation III to Section 2 (38) of the Act.
4. According to petitioner, for determining the applicable rate of tax on food whether it is 5% or 14.5%, the sale turnover on alcohol has to be included as per the provisions of the Act; but, on the aggregate turnover which exceeds Rs.1.5 crores, the petitioner was liable to pay VAT @ 14.5% only on the turnover relating to sale of food and not that on alcohol.
5. The petitioner contends that show-cause notices dt.19.03.2020 were issued by the 1st respondent proposing to levy VAT for the years 2015-16, 2016-17, 2014-15 and 2017-18 proposing to subject the turnover relating to sale of loose alcohol also to VAT; on receiving the show-cause notices on 23.03.2020, the petitioner filed a letter on 26.03.2020 disputing the proposed levy and also stating that petitioner is ready and willing to produce all documentary evidence to substantiate its claim; that petitioner was unable to furnish immediately the documents in view of the lockdown situation prevalent in the State and in the entire country on account of COVID- 19 pandemic; and that it requested the 1st respondent to grant sufficient time till the Government lifts the lockdown restrictions.
6. The petitioner also requested the 1st respondent that an opportunity of personal hearing be given to him before passing of any orders by the 1st respondent. Petitioner however furnished some documents containing turnover statements covering years 2013-14 to 2017-18.
7. The letter dt.26.03.2020 submitted by the petitioners was acknowledged by the 1st respondent on 27.03.2020.
8. The impugned Assessment Orders were passed on 27.03.2020 which were received by the petitioner on 14.05.2020 confirming the levy of VAT proposed in the show-cause notices dt.19.03.2020.
9. The petitioner assails the same on the ground that the said orders are in gross violation of principles of natural justice; that the 1st respondent had disregarded the request made by the petitioner in his letter dt.26.03.2020, and did not grant a fair opportunity and also personal hearing though he requested for the same; and that the levy of VAT on turnover of sale of loose liquor is without jurisdiction and contrary to the provisions of the Act.
10. The counsel for petitioner contended that when a specific request is made for personal hearing, the 1st respondent, who is a quasi-judicial authority is bound to grant the same and any action taken ignoring the said request would be arbitrary and unsustainable.
11. He relied on the decision of this Court in Recon Oil Private Limited (54 APSTJ 167)and contended that the impugned orders were passed in undue haste and in violation of principles of natural justice because though the show-cause notices granted (7) days’ time to file a reply, they were in fact served on the petitioner by Registered Post Acknowledgment Due (R.P.A.D.) on 23.03.2020; and so the 1st respondent was duty-bound to not pass any order till 30.03.2020.
12. He contended that hastily the impugned orders were passed on 27.03.2020 itself even though time granted in the show-cause notices dt.19.03.2020 did not expire; that the extraordinary situation of the lockdown prevalent in the country made it impractical and unfair for the 1st respondent to make the impugned assessments ex parte; the petitioner was always ready and willing to furnish all documents as and when mobility restrictions were lifted by the Government as stated in the petitioner’s letter dt.26.03.2020; that the time of a mere (7) days granted to petitioner to defend its assessment for (5) years from 2013-14 to 2017-18, all at once, was grossly insufficient; and the impugned orders were therefore unsustainable. He therefore prayed that the impugned Assessment Orders be set aside and the matters be remanded to the 1st respondent.
13. Sri J. Anil Kumar, learned Standing Counsel for Commercial Taxes, appearing for respondents, states on instructions from the 1st respondent that if the impugned Assessment Orders were set aside and the matter is remanded to the 1st respondent, the 1st respondent would then given adequate opportunity to the petitioner and also personal hearing to the petitioner and pass a fresh assessment orders in respect to the subject assessment orders.
14. We have considered the submissions of both sides.
15. Admittedly, the show-cause notices dt.19.03.2020 were served on the petitioner only on 23.03.2020. In the said show-cause notices, (7) days’ time was granted to petitioner from the date of receipt of notices to submit objections and documentary evidence. Since the petitioner has admittedly received the show-cause notices on 23.03.2020, the petitioner had time till 30.03.2020 to file objections and also produce documents. But, on 27.03.2020 itself, the 1st respondent passed the impugned orders.
16. That apart, the petitioner had made a request in his letter dt.26.03.2020 which was acknowledged by the 1st respondent on 27.03.2020 that the petitioner was disabled from furnishing readily all the documents in support of the petitioner’s contentions in view of the lockdown situation prevailing in the State and in the country on account of outbreak of COVID-19 and if the 1st respondent were to grant time till the lockdown restrictions for movement were relaxed, the petitioner would furnish the same. The petitioner also requested in the said letter dt.26.03.2020 for an opportunity of personal hearing.
17. The existence of the lockdown prohibiting movement of people on roads on account of outbreak of COVID-19 is an admitted fact. In these circumstances, the 1st respondent cannot reasonably expect the petitioner to furnish all the requisite documents for the petitioner to defend itself, that too for a period of (5) years within the (1) week time granted by the 1st respondent.
18. We are therefore of the opinion that there has been a gross violation of principles of natural justice and fair opportunity was denied to the petitioner by the 1st respondent to defend itself.
19. In this view of the matter, notwithstanding the existence of an effective alternative remedy by way of an Appeal under Section 31 of the Act, we entertain these Writ Petitions on the ground that there has been a violation of principles of natural justice vitiating the impugned assessment orders.
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0. In view of the submissions made by the learned Government Pleader for Commercial Taxes and for the aforesaid reasons, we set aside the impugned orders dt.27.03.2020 passed by the 1st respondent; and remand the matters to the 1st respondent to pass fresh Assessment Orders for each of the Assessment Years in question, after affording reasonable time to the petitioner to submit all the documents and also after affording a personal hearing to the petitioner to put forth its objections before the 1st respondent. 21.This exercise shall be completed within two (02) months from the date of receipt of copy of the order. 22. Accordingly, the Writ Petitions are allowed. No order as to costs. 23. As a sequel, miscellaneous petitions, pending if any in these Writ Petitions, shall stand closed.