Debangsu Basak, J. - (1.) The petitioner has sought a declaration that, the method of selection for audit under Section 43 of the West Bengal Value Added Tax Act, 2003 is arbitrary, illegal and violative of principles of natural justice. Although the petitioner has sought for other reliefs namely, relating to the second proviso of Section 84(1) of the Act of 2003, the same have not been pressed at the final hearing of the writ petition.
(2.) Learned Advocate for the petitioner has referred to Section 43 of the Act of 2003 and submitted that, the Commissioner is required to give notice to an assessee prior to the selection of an assessee for audit under Section 43. He has to give an opportunity of hearing to such assessee prior to the selection. He has to pass a reasoned order as to why a particular assessee has been selected. He has referred to the notice dated October 6, 2015 issued by the Commissioner to the petitioner and submitted that, the commissioner did not give any opportunity of hearing to the petitioner prior to selecting the petitioner to undergo audit under Section 43 of the Act of 2003. The notice dated October 6, 2015 is not informed with any reason. The Commissioner had proceeded to give a post decisional hearing. Such post decisional hearing does not cure the breach of the principles of natural justice happening at the time of selection. He has referred to Section 43(5) of the Act of 2003 and submitted that, by the process of Section 43, an adverse report will get converted to an order of assessment. A selection under Section 43 is likely to result in adverse civil consequences for the assessee. Therefore, an assessee should be given a notice before the selection is made. An administrative order or a decision in matters involving civil consequences has to be made consistently with the rules of natural justice. He has relied upon (SC) (Sahara India (Firm) v. Commissioner of Income-Tax & Anr., 2008 300 ITR 403), (Cal) (Indian Aluminium Co. Ltd. v. Deputy Commissioner of Income-Tax & Ors., 2010 329 ITR 550) and (Cal) (West Bengal State Co-operative Bank Ltd. v. Joint Commissioner of Income-Tax & Ors., 2004 267 ITR 345) in support of such contentions. He has referred to the affidavitin-opposition filed on behalf of the respondent authorities and submitted that, no notice should be taken of such affidavit as the same has not been properly verified. In support of the requirements of a correct verification, learned Advocate for the petitioner has relied upon (Range Forest Officer v. S.T. Hadimani, 2002 AIR(SC) 1147) and (A. K. K. Nambiar v. Union of India & Anr., 1970 AIR(SC) 652). Learned Additional Advocate General appearing for the respondents has submitted that, the issue raised by the petitioner was considered by a Division Bench of the Orissa High Court. He has relied upon an unreported decision of such High Court dated January 20, 2011 passed in W.P. (C) No. 22588 of 2010 (M/s. Prakash Store v. Commissioner of Sales Tax, Orissa & Ors.). Relying upon (Assistant Commissioner, Assessment-II, Bangalore & Ors. v. Velliappa Textiles Ltd. & Anr., 2003 11 SCC 405) he has submitted that, a decision to look into an account of an assessee under Section 43 by itself does not have the effect of a conviction or imposition of a penalty causing an injury to the assessee. Therefore, the principles of natural justice are not attracted at that stage. He has submitted that, one of the issues raised in Velliappa Textiles Ltd. & Anr. was dissented from by the Supreme Court in (Standard Chartered Bank & Ors. v. Directorate of Enforcement & Ors., 2005 4 SCC 530). Learned Additional Advocate General has distinguished the three cases cited on behalf of the petitioner on the point of applicability of Section 43 of the Act of 2003 by submitting that, the decision relied upon on behalf of the petitioner relates to Section 142 proceedings under the Act of 1961. Similar provisions are there in Section 43AB of the Act of 2003. The instant case relates to Section 43 of the Act of 2003.
(3.) The following issues have arisen for consideration in the present writ petition which are as follows:- (i) Is the Commissioner acting under the provisions of Section 43(1) of the West Bengal Value Added Tax Act, 2003 obliged to give notice, an opportunity of hearing to an assessee and pass a reasoned order prior to making a selection thereunder? (ii) What, if any, reliefs are the parties entitled to?;