VAT Tribunal must Consider all Grounds Raised By Dealer: Gujarat HC Remands Assessment Matter [Read Order]

In a recent decision, the Gujarat High Court observed that the VAT Tribunal must consider all grounds raised by a dealer before passing its order, and that failure to do so amounts to a violation of the principles of natural justice.

Vithlani Exports, a proprietary concern engaged in trading agricultural products, filed a petition challenging the orders passed by the Gujarat Value Added Tax Tribunal dated 20 September 2024 and 29 January 2025.

The petitioner’s counsel submitted that while deciding Second Appeal No. 440 of 2018, the Tribunal failed to consider key issues such as the non-service of the mandatory statutory notice in Form 6B and the levy of penalty under Section 34(12) of the Gujarat Value Added Tax Act read with Section 9(2) of the Central Sales Tax Act.

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The petitioner’s counsel argued that these issues were specifically raised in the second appeal and again in the rectification application, but the Tribunal did not address them. The State’s counsel also accepted before the High Court that these grounds had not been dealt with in the Tribunal’s order.

The Division Bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi explained that a fair hearing requires consideration of every contention raised by the parties. The court observed that before passing any order, all issues must be dealt with to ensure that the decision is complete and unbiased.

The court held that the Tribunal’s order could not stand since it was passed without considering the issues raised by the petitioner. The court quashed the order dated 29 January 2025 and restored the second appeal to the Tribunal’s file.

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