2011 (8) TMI 1015 - HC - VAT and Sales Tax

Writ of certiorari to quash the order of assessment being in violation of principles of natural justice, and also contrary to second proviso to section 3(2), and section 16 of the Tamil Nadu General Sales Tax Act, 1959. Held that - The assessment order in the case of petitioner has been revised, in violation of provision of the Act, and principle of natural justice. Consequently, the writ petition is allowed, the impugned order of revised assessment is ordered to be set aside, with liberty to the respondent to pass fresh orders, after complying with the principles of natural justice and supplying necessary materials forming basis for review to the petitioner.

Summary

Issues involved:
Violation of principles of natural justice in assessment order for the year 2003-04 under the Tamil Nadu General Sales Tax Act, 1959.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The petitioner, a dealer in hides and skins, reported a total taxable turnover for the assessment year 2003-04. The respondent issued a pre-revision notice proposing to reopen the completed assessment and pass a revised order. The petitioner objected to the show-cause notice and requested the materials forming the basis for the proposed revision. However, the assessing authority revised the assessment without providing an opportunity for a hearing or supplying the necessary materials to the petitioner. The petitioner contended that the assessment order was passed mechanically without considering their specific plea regarding the applicability of the proviso clause to section 3(2) of the Act. The court, citing previous judgments, emphasized the importance of authorities providing reasons for their conclusions to enable effective remedies like appeals. The court set aside the impugned order of revised assessment, directing the respondent to pass fresh orders after complying with the principles of natural justice and supplying necessary materials to the petitioner.

2. Compliance with Statutory Provisions:
The petitioner's case aligns with previous court decisions where orders of revised assessment were set aside due to a lack of reasons provided in the orders. The court highlighted the necessity for authorities to assign reasons for their conclusions to prevent the defeat of effective remedies like appeals. The court directed the respondent to consider the objections raised by the petitioner and pass fresh orders after due consideration. Additionally, the respondent was instructed to furnish the petitioner with copies of third-party records relied upon during the assessment process to enable the petitioner to submit explanations effectively. The writ petition was allowed, setting aside the impugned order of the respondent and providing the respondent with the opportunity to pass fresh orders while adhering to principles of natural justice.

Conclusion:
The High Court of Madras found that the assessment order for the year 2003-04 was revised in violation of the provisions of the Tamil Nadu General Sales Tax Act, 1959, and the principle of natural justice. The court allowed the writ petition, setting aside the impugned order of revised assessment and granting the respondent the liberty to pass fresh orders after ensuring compliance with the principles of natural justice and supplying necessary materials to the petitioner. The connected miscellaneous petition was closed without costs.