Gujarat High Court

Vithlani Exports vs State Of Gujarat on 16 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                             C/SCA/9536/2025                                   JUDGMENT DATED: 16/10/2025

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                                      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                       R/SPECIAL CIVIL APPLICATION NO. 9536 of 2025
                                                           With
                                       R/SPECIAL CIVIL APPLICATION NO. 9656 of 2025

                       FOR APPROVAL AND SIGNATURE:

                       HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                                                and
                       HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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                                       Approved for Reporting                 Yes
                                                                              No
                                                                            ✔

================================================== VITHLANI EXPORTS Versus STATE OF GUJARAT & ORS.

================================================== Appearance:

MR. APURVA N MEHTA(7202) for the Petitioner(s) No. 1 MS SHRUNJAL SHAH ASSISTANT GOVERNMENT PLEADER for the Respondent(s) No. 1,2,3

==================================================

CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI

Date : 16/10/2025

ORAL COMMON JUDGMENT

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1. Heard learned advocate Mr. Apurva Mehta for the

petitioner and learned Assistant Government Pleader Ms.

Shrunjal T. Shah for the respondents.

2. Rule returnable forthwith. Learned Assistant Government

Pleader Ms. Shrunjal Shah waives service of notice of Rule for

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the respondents.

3. Having regard to the controversy involved which is in

narrow compass, this matter is taken up for hearing with the

consent of learned advocates for both the parties.

4. As the issue is common in both the petitions, Special Civil

Application No. 9536 of 2025 is taken a lead matter and facts

are recorded from the said petition.

5. By this petition under Article 226 of the Constitution of

India, the petitioner has prayed to quash and set aside the

impugned order dated 29.01.2025 passed by the learned

Gujarat Value Added Tax Tribunal at Ahmedabad (For Short

"the Tribunal") passed in Misc. Application No. 38 of 2024 and

further to restore the Second Appeal No. 440 of 2018.

6. The brief facts leading to filing of the writ petition is that

the petitioner is a proprietary concern and is carrying on the

business of trading in agricultural products. The petitioner

concern is duly registered as a dealer under the Value Added

Tax Act (hereinafter referred to as "the VAT Act" as well as

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under the Central State Tax Act (For Short "CST Act").

6.1. It is the case of the petitioner that the petitioner has filed

all the periodic as well as annual self-assessment returns for the

period under consideration. It is the case of the petitioner that

the respondent no. 2 (hereinafter referred to as "the

respondent") passed the Assessment Order for the Financial

year 2009-10 on 31.03.2014 under Section 34(2) of the VAT Act

read with Section 9(2) of the CST Act raising additional dues of

Rs.16,92,165/- along with interest amount of Rs.6,18,459 and

penalty of Rs.2,14,741/-. The said dues were raised due to

disallowance of the Input Tax Credit in the Assessment Order

passed under the VAT Act.

6.2. Being aggrieved by the Assessment Order passed by the

respondents, the petitioner challenged the order dated

31.03.20214 before the learned appellate authority under

Section 73(1) of the VAT Act read with Section 9(2) of the CST

Act.

6.3. It is the case of the petitioner that the entire amount of tax

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of Rs.8,58,964/ - towards pre-deposit was paid on 21.05.2015,

which has resulted into appeal being admitted for hearing on

30.06.2014. Subsequently on 21.03.2018, the appellate

authority rejected the appeal preferred by the petitioner and

confirmed the Assessment Order dated 31.03.2014 passed by

the respondent.

6.4. Being dissatisfied by the order passed by the appellate

authority, the petitioner preferred Second Appeal under Section

73 of the VAT Act read with Section 9(2) of the CST Act before

the Tribunal, which came to be numbered as Second Appeal No.

440 of 2018. In the memo, the petitioner has raised various

grounds of appeal before the Tribunal viz. Non-service of

mandatory statutory notice in Form 6B, levy of penalty under

Section 34(1) of the VAT Act read with Section 9(2) of the CST

Act etc. The Tribunal vide order dated 20.09.2024 while partly

allowing the Second Appeal had allowed the Input Tax Credit of

Rs.4,973/- and confirmed the disallowance of remaining Input

Tax Credit of Rs.11,26,733/-.

6.5. Being aggrieved by the non-consideration of the grounds

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raised by the petitioner in the Second Appeal i.e. non-service of

mandatory statutory notice in Form 6B, levy of penalty under

Section 34(12) of the VAT Act read with Section 9(2) of the CST

Act, the petitioner preferred rectification application being

Misc. Application No. 38/2024 before the Tribunal. The Tribunal

vide judgment and order dated 29.01.2025 rejected the

rectification application on the ground that Second Appeal was

decided on merits after hearing the parties and therefore, the

judgment and order passed by the Tribunal was appealable

order under Section 78 of the VAT Act.

6.6. Being dissatisfied by the order dated 29.01.2025 passed by

the Tribunal in Misc. Application No. 38 of 2024 as well as the

order dated 20.09.2024 passed by the Tribunal are impugned in

the present petition.

7. Learned advocate Mr. Apurva Mehta for the petitioner

submitted that the order passed by the Tribunal is arbitrary and

contrary to the law laid down by this Court inasmuch as the

Tribunal has failed to deal with the additional grounds which

are raised by the petitioner in the Second Appeal under the

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provisions of the CST Act viz non-service of mandatory statutory

notice in Form 6B, levy of penalty under Section 34(1) of the

VAT Act read with Section 9(2) of the CST Act.

7.1. It is further submitted that the Tribunal has not

considered the relevant grounds of appeal and this mistake of

fact is apparent from the record and the same was being

capable of being rectified under the provisions of Sections

79(1) and 79(2) of the VAT Act read with Section 9(2) of the CST

Act. In wake of such submissions, learned advocate for the

petitioner has requested to remand the matter back to the

Tribunal for consideration of the issues which are not dealt with

by the Tribunal.

8. Per contra, learned Assistant Government Pleader Ms.

Shrunjal Shah for the respondents was not in a position to

controvert the submission made by the petitioner and

categorically accepted that the grounds raised by the petitioner

in the Second Appeal are not dealt with by the Tribunal and as

such, the Court may pass appropriate order.

9. Having heard the learned advocates for the respective

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parties and having perused the material on record, the short

controversy in question is with regard to the non dealing of the

issues raised by the petitioner in the Second Appeal by the

Tribunal. It is not in dispute that specific ground of non-service

of mandatory statutory notice has been raised by the petitioner

and the same was part of the Misc. Application. The question of

levy of penalty under Section 34(12) of the VAT Act read with

Section 9(2) of the CST Act were also raised by the petitioner in

Second Appeal as well as Misc. Application, which reads as

under :-

"(3) The above contention was also raised at the time of final hearing of the case on 19.06.2024. We have made written submission at Para (10) (11) and (12) regarding statutory notice and non providing 15 days time and same was not served tot he dealer. The extract copy of the Para (10) (11) and (12) out of the submission dated 19.06.2024 is attached here with for ready reference. The submission is very clear on which no decision whatsoever adjudicated by the Hon'ble Tribunal.

(4) The appellant has also raised the ground against the levy of the penalty under Section 34(7) and 34(12) of the Act. In the course of hearing of Second Appeal the written submission dated 19.06.2024. The argument at para (13) was raised. The copy o the said argument submitted before the Hon'ble Tribunal is enclosed herewith on which adjudication was given in Second Appeal order dated 20.09.2024."

10. Having gone through the judgment and order passed by

the Tribunal in Misc. Application, it is not in dispute that the

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grounds raised by the petitioner in Second Appeal are not

considered by the Tribunal. It is a fundamental proposition of

law that the other side should be heard and all the issues should

be considered before any order is passed. The maxim of Audi

Alteram Partem is broad enough to include the rule against bias

since a fair hearing is must for it to be unbiased hearing. In the

instant case, the fact is not in dispute that the grounds raised by