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2012 (9) TMI 902 - HC - VAT and Sales Tax
Issues involved: Interpretation of tax laws, opportunity of personal hearing u/s rule 12A of Tamil Nadu Value Added Tax Rules, 2007.
Interpretation of Tax Laws: The petitioner, a registered dealer in "insulating materials," sought clarification regarding the tax rate applicable to their products under the Tamil Nadu Value Added Tax Act, 2006. The Commissioner of Commercial Taxes had issued a clarification stating that the "insulation materials" are taxable at 14.5 per cent. The petitioner contended that their products should be taxed at a lower rate under a different entry. The High Court found that the petitioner had requested a personal hearing, which was not provided before the impugned proceedings were passed. The Court set aside the proceedings and remitted the matter back to the Commissioner for a fresh decision after providing the petitioner with a personal hearing as requested. Opportunity of Personal Hearing u/s Rule 12A: The main contention of the petitioner was that the impugned proceedings were issued without granting them an opportunity of personal hearing as required by rule 12A of the Tamil Nadu Value Added Tax Rules, 2007. The respondents argued that such an opportunity is only given if the party desires it. The Court observed that the petitioner had indeed requested a personal hearing in their letter dated July 4, 2012, but it was not provided before the proceedings were passed. Consequently, the Court directed the first respondent to reconsider the clarification sought by the petitioner after issuing a notice and providing an opportunity of personal hearing, in accordance with the rules. In conclusion, the High Court held that the impugned proceedings were set aside, and the matter was remitted back to the first respondent for a fresh decision after providing the petitioner with a personal hearing. The Court emphasized the importance of following procedural rules, particularly when a party requests a personal hearing for clarification on tax matters.
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