Decided on September 07,2009

Sales Tax Officer, Jorabagan Charge And Ors. Respondents


R.K.DATTA CHAUDHARI,JUDICIAL MEMBER - (1.) IN this application the petitioner asserted that there was violation of natural and legal justice in making his assessment of tax for the period four quarter ending of 2006 under the provisions of the West Bengal Value Added Tax Act, 2003. In respect of this assessment period and another period, there had been assessment proceeding by the Sales Tax Officer, Central Section and the Sales Tax Officer, Jorabagan as well as an investigation proceeding by the Bureau of Investigation. These were challenged by the petitioner in an application before this Tribunal which was registered as RN -253 of 2008. In course of hearing of that application, the learned State Representative Mr. A.K. Nath represented that the assessment authority intended to take up the assessment proceeding on receipt of the investigation report from the Bureau of Investigation and on receipt of the investigation report that would be relied on in the assessment proceeding. Under order dated August 8, 2008 in the said case RN -253 of 2008, this Tribunal directed stay of the assessment proceeding till submission of the report by Bureau of Investigation with direction that the Revenue would decide which of the assessment authorities, namely, Bureau of Investigation, the Sales Tax Officer, Central Section and the Sales Tax Officer, Jorabagan Charge would make the assessment. Thereafter the petitioner received a notice in form 25 dated August 29, 2008 for assessment under Section 46 of the West Bengal VAT Act, 2003 directing appearance on September 22, 2008 without supplying a copy of the aforesaid investigation report. The petitioner appeared and he was heard in the assessment proceeding under the provisions of the Central Sales Tax Act, 1956 unlike the West Bengal Value Added Tax Act, 2003. On September 25, 2008 he made a written objection to initiation of assessment proceeding without supplying a copy of the investigation report as well as to record his appearance on September 22, 2008 in the assessment proceeding under Central Sales Tax Act. Without giving the petitioner to controvert and conceiving adverse opinion against the petitioner on the basis of the said investigation report, the Sales Tax Officer passed the impugned assessment order. In the said assessment order the Sales Tax Officer observed that the registration certificate of some dealers from whom the petitioner purchased goods for resale had been cancelled. The source of those information was not disclosed. The petitioner had documentary evidence to prove the existence thereof. The copy of the order sheet supplied to the petitioner was not complete and the Sales Tax Officer refused supply copy of the complete order. In the assessment proceeding some documents were relied on without giving the petitioner opportunity to controvert the same. The purchase tax was levied though was not payable as per the law prevailed at the relevant time of purchase. He challenged the legality of the assessment order passed by the Sales Tax Officer, Jorabagan charge in the Case No. 50/B/2008 in respect of four quarter ending March 31, 2006 under order dated November 18, 2008 on the ground of denial of opportunity of being heard and prayed for setting aside the said assessment order dated November 18, 2008, direction for supply of the copy of the investigation report and copy of the complete assessment order. Respondent No. 1, Sales Tax Officer, Jorabagan charge, contested the application by filing affidavit in opposition supporting the impugned assessment order. His case in short is this. The assessment proceeding was going to be barred on September 30, 2008 though subsequently it was extended up to November 30, 2008 and as such he served the notice in form 25 for initiating the assessment proceeding fixing September 22, 2008 for appearance and hearing. On the said date the authorities represented of the petitioner attending the proceeding put signatures in the order sheets. The assessment was completed on the same date though the order was reserved and hence the objection received subsequently would not be entertained. There were no provisions in the statute for the supply of the copy of the investigation report. In course of investigation by the Bureau of Investigation the petitioner was heard on a number of occasion and hence the petitioner was well aware of the said investigation report. The dealer's claim for ITC was not allowed because the dealer could not substantiate the movement of the goods by producing challans with vehicle number and payment to the transporter. He also denied supply of the incomplete investigation report.
(2.) FROM the face of the impugned assessment order it is found that the assessment is based, inter alia, on the investigation report and some documents received from the Bureau of Investigation. Admittedly the contents thereof were not communicated to the petitioner. The learned advocate Mr. Bhattacharya quoting from the book, Discipline of Law by Lord Denning and The Administrative Law, 9th edition, 2004 by H.W.R. Wade and C.F. Forsy as well as citing the judgment of the honourable Supreme Court of India in Dhakeswari Cotton Mills v. Commissioner of Income -tax reported in : [1954] 26 ITR 775:, AIR 1955 SC 65 contended that the absence of communication amounted denial of the legal right of the petitioner to be heard which is recognized by the principle of natural justice. Lord Denning observed that a proper hearing must always include a fare opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to the view. In the aforesaid Supreme Court case the Income -tax Tribunal violated certain fundamental rules of justice firstly by not disclosing to the assessee what information had been supplied to it by the Departmental Representative and secondly by not giving any opportunity to the company to rebut the material furnished to it by him. The honourable court on this fact held that it resulted denial of fair hearing. It is settled principle of natural justice that no evidence can be used against any person without giving him opportunity to rebut this. Section 46(1)(i) of the West Bengal Value Added Tax Act, 2003 provides, inter alia, that the Commissioner while proceeding under Section 46 shall proceed in such manner as may be prescribed. The prescription is given in Rule 57 of the West Bengal Value Added Tax Rules, 2005. Under Rule 57(1)(a) the assessing authority while hearing a dealer for making an assessment has to consider besides objection, those to rebut the adverse finding, if any, made in the report of audit. So the statute also recognized the aforesaid right. Absence of any provision in the statute for the supply of the copy of the investigation report of the Bureau of Investigation cannot take away this right. Investigation report of the Bureau of Investigation itself a privileged document and as such access thereto is not a right. But if this report or any part thereof is relied on assessment of tax of any person, contents of the same has to be disclosed to the person against whom it is used. The impugned order of assessment does not suggest that the petitioner was given opportunity to rebut the evidence on which the assessing authority concluded that the registration of the dealer from whom he had purchased the goods was cancelled. So it should be held that the assessing authority violated fundamental rules of justice with the omission to communicate the contents of the investigation report of the Bureau of Investigation and documents as well as evidence of cancellation of registration certificates which were considered by the assessing authority while making the impugned assessment. The impugned assessment order is therefore liable to be set aside giving liberty to the assessing authority to make the fresh assessment giving the dealer opportunity of being heard. Denial of opportunity to rebut the evidence in course of assessment proceeding as found in this case does not make an assessment proceeding void ab initio as suggested by the learned advocate Mr. Bhattacharya. In the result the application succeeds.
(3.) HENCE , it is ordered that the application is allowed on contest without cost. The impugned assessment order stands set aside giving liberty to the assessing authority to hold the proceeding afresh as per law particularly, supply of the material contents of the investigation report and documents to be acted upon in making up the assessment and giving opportunity to rebut any evidence to be used against the dealer. The petitioner shall appear in the forenoon of September 16, 2009 for obtaining the date of hearing. The assessment file be returned.;

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