IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 14TH JUNE 2011 / 24TH JYAISHTA 1933 WP(C).No. 8234 of 2011(D) ------------------------- PETITIONER(S): --------------- M/S.THREE STAR PLY WOODS, PATHIPPALAM, ALLAPRA P.O., PERUMBAVOOR, REPRESENTED BY ITS MANAGING PARTNER K.M.ALI. BY ADV. DR.K.B.MUHAMED KUTTY, SENIOR ADVOCATE SRI.K.M.FIROZ RESPONDENT(S): --------------- 1. THE COMMERCIAL TAX OFFICER, SECOND CIRCLE, PERUMBAVOOR-683 572. 2. INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, MUVATTUPUZHA-683 501. BY ADV.SRI.V.K.SHAMSUDDEEN, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 8234 of 2011(D) APPENDIX PETITIONER'S EXHIBITS :- P1 :- COPY OF THE NOTICE DATED 8.11.2009 P2 :- COPY OF THE OBJECTION DATED 27.11.2010 P3 :- COPY OF THE ASSESSMENT ORDER FOR 2008-09 DATED 20.12.2010 RESPONDENTS' EXHIBITS :- NIL //TRUE COPY// P.A.TO JUDGE ami/ C.K.ABDUL REHIM, J. ------------------------------- W.P.(C).No.8234 of 2011 ------------------------------- Dated this the 14th day of June, 2011. J U D G M E N T Ext.P3 order of assessment finalised under Section 25 (1) of the Kerala Value Added Tax Act (KVAT Act), with respect to the year 2008-09, is the subject matter of challenge in this writ petition. Under normal circumstances, considering the effective remedy of statutory appeal provided, this Court may not be inclined to entertain any challenge against an order of assessment. But the petitioner raises specific contention to the effect that, the impugned order is unsustainable, since it is issued in violation of the mandatory procedure prescribed under the relevant provisions and also in violation of principles of natural justice. 2. Contention of the petitioner is that, objections submitted against the proposal notices were discarded by the assessing authority in a cryptic manner, without proper application of mind, and without affording any opportunity of 2 W.P.(C).No.8234 of 2011 personal hearing. Drawing attention of this Court to the contends of Ext.P3, it is submitted that, even after narration of the contentions raised, the authority had not considered merits of such contentions, nor any reasoning is mentioned for discarding such contentions. It is further argued that the opportunity of hearing contemplated under the proviso to Section 25 of the KVAT Act has not been provided. Petitioner relies on a decision of this Court in Suzion Infrastructure Service Ltd. Vs. Commercial Tax Officer (W.C.), Ernakulam (2010(3) KHC 299 (Ker) to contend that, the opportunity contemplated with respect to the personal hearing is not an empty formality and any violation will vitiate the order of assessment. 3. On a perusal of the impugned order of assessment it is evident that, the assessing authority had illustrated all main contentions raised. After such illustration, the assessing authority observed as follows :- “ I have verified the reply in details. The Form'H' along with Bill of lading and 3 W.P.(C).No.8234 of 2011 statement for Rs.7,41,788/- for the claim of exemption for export sales is accepted and allowed and no reason to deviate from the proposal. So the assessment under section 25(1) of the KVAT Act 2003 for the year 2008-09 to completed as under.” 4. It is evident that the assessing authority had failed to mention any reasoning for non acceptance of the contentions raised in the objections filed. It is trite law by this time that the assessing authorities are exercising quasi- judicial functions and they are expected to write reasoned orders. A mere observation to the effect that the assessing authority had found no reasons to deviate from the proposal, will not serve the requirements. Consideration of merits of the contentions should be reflected in the assessing order. Any non-speaking order, through which such contentions were discarded, cannot withstand the test of sustainability. Further, the impugned order does not reflect about any opportunity of hearing afforded to the petitioner. Learned Government Pleader submits that, the 4 W.P.(C).No.8234 of 2011 petitioner had failed to appear for a personal hearing, after receipt of the proposal notice. But for compliance of the requirement under Section 25, it is mandatory on the part of the assessing authority to issue specific notice of hearing, after obtaining the objections to the proposal notice, by fixing the date and time of such hearing. Since there was failure to comply with such procedure, it cannot be held that an effective opportunity of personal hearing was afforded. For the above said reasons, I am of the view that, the impugned order of assessment is unsustainable in the eye of law, and is liable to be quashed. 5. In the result, the writ petition is allowed and Ext.P3 order is hereby quashed. The 1st respondent is directed to consider the matter afresh and to finalise the assessment, after affording a reasonable opportunity to the petitioner for personal hearing. Needless to say that, the petitioner shall be permitted to produce books of accounts and other records in support of the contentions raised. 6. Fresh order of assessment in this regard shall be 5 W.P.(C).No.8234 of 2011 issued, as early as possible, at any rate within a period of one month from the date of receipt of a copy of this judgment. C.K.ABDUL REHIM, Judge ami/