Gauhati High Court: The order of the Superintendent of Taxes (Respondent 2) charging 12.5% VAT on coal tar in provincial assessment was set aside by a Division Bench comprising of Ajit Singh, CJ and Prasanta Kumar Deka, J.

The petitioners were dealers of coal tar. They filed tax returns wherein they assessed coal tar for 4% tax. The said return was accepted by the respondents. However, later, Respondent 2 passed an order of provincial assessment under Section 34 of the Assam Value Added Tax Act, 2003 whereby the return filed by the petitioners was re-assessed and the coal tar was charged at 12.5% tax on grounds that earlier a wrong classification was done as far as coal tar was concerned. Aggrieved by the same, the petitioners filed the instant petition.

The High Court considered the record and found that the impugned order was passed under Section 34 of the Act which mandates that before passing any order of provincial assessment, the assessee is to be given a right of hearing via giving him a show-cause notice. In the case, the Court found that no show-cause notice was given to the petitioner, thus, violating the mandate of Section 34. Also, it was a clear case of violation of principles of natural justice as no right of hearing was given to the petitioner before passing orders prejudicial to him. Thus, the petition was allowed and the impugned order was set aside. [Kamakhya Coal Tar Industries v. State of Assam, 2018 SCC OnLine Gau 350, order dated 07-05-2018]

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