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2020 DIGILAW 511 (TS)

Smartgen Infra Pvt. Ltd. v. State Of Telangana

2020-06-26

M.S.RAMACHANDRA RAO, T.AMARNATH GOUD

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JUDGMENT M.S.Ramachandra Rao, J. - The petitioner is a registered Dealer with Commercial Tax Department carrying on business in inter-State sales and High Seas sales (sales in the course of import) of non-coking coal. 2. According to the petitioner, in 2015-16, it had sales turnover of Rs.19,47,70,555/- and turnover worth of Rs.1,22,16,25,117/- towards sales in the course of import (High Seas sales) respectively. 3. On 19.06.2019, the 2nd respondent served on the petitioner through e-mail a show-cause notice dt.04.06.2019 proposing to levy a tax of Rs.20,53,77,372/- and asked the petitioner to file objections thereto within 7 days. The petitioner was also afforded a personal hearing on 19.06.2019. 4. According to the petitioner, the said e-mail went into the spam folder in the petitioner's e-mail and the petitioner did not notice the same until the 2nd respondent called the petitioner to inform about the said show-cause notice in March, 2020 through telephone. 5. The petitioner contends that the petitioner had already filed C forms worth of Rs.15,63,69,028/- pertaining to the inter-State sales on 03.04.2019 and sought time to furnish the balance C forms which were not received by the petitioner from its vendors. The petitioner also informed that it can furnish the details in respect of High Seas sales turnover and filed copy of a Bill Of Lading along with the Writ Petition. 6. According to the petitioner, the 2nd respondent gave time permitting the petitioner to file the balance C forms after obtaining the same from the petitioner's dealers including all details in respect of High Seas sales turnover. 7. The petitioner however received on 30.03.2020 the Assessment Order No.48562 passed by the 2nd respondent, wherein the 2nd respondent stated that the petitioner was issued a show-cause notice electronically and that it had filed response, but it did not appear for personal hearing, and levied tax of Rs.18,27,03,863.38 on the petitioner. 8. The petitioner contends that the 2nd respondent wrongfully treated the sales in the course of import (High Seas sales) as inter-State sales and raised artificial demand of Rs.18,27,03,863.38 as tax payable. 9. The petitioner's counsel also pointed out that there is a procedure contemplated in Rule 64 of the Telangana VAT Rules, 2005 mandating service of notice in person or by registered post and the Rules did not contemplate service of notice by e-mail. 10. 9. The petitioner's counsel also pointed out that there is a procedure contemplated in Rule 64 of the Telangana VAT Rules, 2005 mandating service of notice in person or by registered post and the Rules did not contemplate service of notice by e-mail. 10. The petitioner contended that there has been violation of principles of natural justice and the petitioner had not noticed the showcause notice dt.19.06.2019 alleged to have been sent by e-mail since it had gone into spam folder of the petitioner's e-mail and the petitioner cannot be penalized in these circumstances. 11. Sri M.Govind Reddy, Special Counsel for Commercial Taxes does not dispute that a show-cause notice under the Telangana VAT Act, 2005 is required to be served as per Rule 64 of Telangana VAT Rules, 2005 in person or through registered post, and service of notice by e-mail is not contemplated. 12. In the light of the circumstances pleaded by the petitioner that the petitioner had not noticed the show-cause notice dt.19.06.2019 since it had gone into the spam folder of the petitioner's e-mail, there is a violation of principles of natural justice. 13. Accordingly, the Writ Petition is allowed; the impugned Assessment Order No.48562 dt.30.03.2020 passed by the 2nd respondent is set aside; the petitioner is granted four (4) weeks time from the date of receipt of a copy of this order to reply to the show-cause notice dt.04.06.2019 issued by the 2nd respondent and also file supporting material; the 2nd respondent shall afford a personal hearing to the petitioner thereafter; and then pass a reasoned order in accordance with law and communicate it to the petitioner within eight (8) weeks from the date of receipt of a copy of this order. 14. Pending miscellaneous petitions, if any, in this Writ Petition shall stand closed. No costs.