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2016 (9) TMI 1252 - HC - VAT and Sales TaxDemand - principles of natural justice - Held that - It is the specific submission of the appellant, as per paragraph No.4 of the affidavit filed in support of the Writ Petition, that as against the notice dated 13.10.2015 issued by the third respondent, the appellant submitted his response on 19.10.2015 in person and informed the third respondent that he had already paid the tax along with the returns. However, it is the stand of the respondents that despite being afforded opportunity, the appellant did not avail of the same. In this connection, it is pertinent to point out that as per the Circular No.7/2014, BB1/3589/2014, dated 03.02.2014, as regards the revision of assessment before passing the revision order, the dealer should be given reasonable opportunity, if required so and no order of revision should be made without affording an opportunity to the dealer as provided under Sections 22,25,27 of the Act. In the light of the defence taken by the appellant and also the Circular, this Court is of the considered view that the appellant should be afforded to one more opportunity to sustain his plea as to the payment of tax along with the returns - appeal allowed - matter on remand.
Issues:
1. Lack of personal hearing before assessment order. 2. Alleged failure to respond to notice and subsequent demand. 3. Legal validity of the assessment proceedings. 4. Application of Circular No.7/2014 guidelines for revision of assessment. 5. Request for remand to sustain the plea regarding tax payment. Analysis: 1. The appellant, a dealer in fertilizer and cement, was assessed for the year 2012-2013 under Section 22 of the TANVAT Act. Subsequently, a notice proposing to revise the Input Tax Credit (ITC) claim and penalty under Section 27 of the Act was issued without affording a personal hearing to the appellant. The appellant contended that he had paid the tax along with the returns and had original bills to prove the transactions. The lack of personal hearing before the assessment order was a key grievance raised by the appellant. 2. Despite the appellant's response to the notice, the assessment order was issued, raising a demand. The appellant challenged the legality of the proceedings through a writ petition. The court observed that although the appellant claimed to have filed a reply in person, it was deemed unbelievable. The appellant was granted liberty to seek remedy before the appellate authority within the stipulated time. The appellant, aggrieved by the dismissal, preferred a Writ Appeal. 3. The appellant cited Circular No.7/2014, emphasizing the guidelines for revision of assessment under the TNVAT Act. The Circular stressed the necessity of providing a reasonable opportunity and personal hearing to the dealer before passing a revision order. The court considered the appellant's defense and the Circular, concluding that the appellant should be given another opportunity to substantiate the tax payment claim. 4. The appellant maintained that all necessary documentation existed to support the transactions and tax payments made to M/s. India Cements Ltd. On the contrary, the Additional Government Pleader argued that the appellant did not respond despite a personal hearing being offered, and the assessment was done after careful scrutiny, leading to the demand raised. 5. In the final judgment, the Court allowed the Writ Appeal, setting aside the impugned order and remanding the matter back to the third respondent. The appellant was directed to be given another opportunity to present his case before the third respondent, ensuring compliance with the law and Circular guidelines. The third respondent was instructed to complete the process and pass orders within four weeks from the date of receipt of the order.
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