2011 (6) TMI 707 - HC - VAT and Sales Tax

Whether the petitioner was not personally heard? Held that - The writ petitions are dismissed in so far as questioning the revised assessment of tax with liberty to the petitioner to prefer appeal before the appellate authority to question the revised assessment of tax, within a period of two weeks from the date of receipt of a copy of this order and if such an appeal is filed, the appellate authority is directed to consider the appeal and dispose of the same on the merits without reference to delay and without insisting 25 per cent of the amount payable under the impugned orders. The writ petitions are allowed in so far as levying penalty and the matter is remanded back to the respondent to pass fresh orders after providing personal hearing.The Registry is directed to return the original impugned orders to the petitioner to prefer appeal.

Summary

Issues:
1. Challenge to revised assessment of tax orders under section 16 of the Tamil Nadu General Sales Tax Act, 1959.
2. Imposition of penalty under section 23 of the Act without a personal hearing.

Analysis:

Issue 1: Challenge to Revised Assessment of Tax Orders
The petitioner challenged the three revised assessment of tax orders issued by the respondent for the assessment years 2001-02, 2002-03, and 2003-04 under section 16 of the Act. The respondent contended that there was an escaped turnover and the petitioner was not entitled to claim the tax rate at three percent under section 3(5) of the Act. The petitioner sought permission for the appellate authority to entertain the appeal without insisting on 25 percent of the tax payable under the impugned order. The court dismissed the writ petitions challenging the revised assessment of tax but granted liberty to the petitioner to prefer an appeal within two weeks without the requirement of depositing 25 percent of the amount.

Issue 2: Imposition of Penalty without Personal Hearing
The respondent levied a penalty on the petitioner under section 23 of the Act without providing a personal hearing. The court noted that section 23 requires a reasonable opportunity of "being heard," unlike the proviso to section 16(2) of the Act. Citing previous judgments, the court emphasized the necessity of a personal hearing while imposing penalties. Therefore, the court quashed the penalty orders and remanded the matter back to the respondent to pass fresh orders after providing a personal hearing to the petitioner.

In conclusion, the writ petitions were dismissed concerning the revised assessment of tax, allowing the petitioner to appeal without the need for depositing 25 percent of the amount. However, the petitions were allowed regarding the imposition of penalties, and the matter was remanded for fresh orders after ensuring a personal hearing. The Registry was directed to return the original impugned orders to the petitioner for the appeal process.