2014 (7) TMI 1091 - HC - VAT and Sales Tax

Validity of impugned order - Violation of principle of natural justice - Opportunity of hearing not provided - Order passed before the expiry of time granted for personal hearing - Held that - On a perusal of the records, it appears that before passing the order impugned in this Writ Petition, no opportunity whatsoever has been granted to the petitioner to give his explanation for the show cause notice dated 21.5.2014 which was received by the petitioner on 27.5.2014 only. - petitioner is prepared to deposit 10% of the Tax amount and the matter may be remanded back to the respondent for passing a fresh order after hearing the petitioner. - Decided conditionally in favour of assessee.

Summary

Issues:
Challenge to Assessment Order under Tamil Nadu Value Added Tax Act, 2006; Violation of principles of natural justice in passing the impugned order without granting proper opportunity for explanation; Remand of the matter for fresh order after petitioner's deposit of 10% tax amount.

Analysis:
The Writ Petition challenges the Assessment Order of the respondent dated 30.5.2014, seeking its quashing. The petitioner, a company registered under the Tamil Nadu Value Added Tax Act, 2006, engaged in various services, contested the assessment proposing a 10% value of total receipts as materials consumed, which the petitioner deemed contrary to established legal principles. The petitioner alleged lack of opportunity to file objections, with the notice for explanation received late on 27.5.2014 and the impugned order issued on 30.5.2014 before the expiry of the granted time for a personal hearing.

The Court observed that no opportunity was provided to the petitioner to explain in response to the show cause notice dated 21.5.2014, received only on 27.5.2014. The petitioner, through counsel, expressed willingness to deposit 10% of the tax amount and requested a remand for a fresh order after proper hearing. Both parties agreed to this proposal, leading to the Court allowing the Writ Petition, setting aside the impugned order of 30.5.2014, and remanding the matter to the respondent on the condition of the petitioner's deposit of 10% of the demanded tax amount by 31.07.2014. No costs were awarded in this decision.

This judgment highlights the importance of adhering to principles of natural justice, ensuring parties are given a fair opportunity to present their case before any adverse orders are passed. The Court's decision to remand the matter for fresh consideration after the petitioner's deposit signifies a balanced approach to rectifying procedural errors while upholding the integrity of the assessment process under the relevant tax legislation.