2016 (3) TMI 1154 - HC - VAT and Sales Tax

Natural justice - validity of assessment order - petitioners claim that as per Section 27(3) of TNVAT Act, personal hearing is must before the order impugned in this Writ Petition - Held that - the petitioner, in order to show their bona fides, voluntarily comes forward to pay 20% of the tax demanded by the authorities, the order impugned in this Writ Petition stands set aside and the matter is remitted back to the authorities concerned on condition that the petitioner should pay 20% of the demanded tax in question, with the respondent, on or before 31.03.2016, without waiting for an order copy, failing which, the respondent is at liberty to proceed against the petitioner in accordance with law - petition allowed - decided in favor of petitioner.

Summary

Issues:
- Failure to provide personal hearing to the petitioner
- Proper consideration of petitioner's reply
- Requirement of depositing 20% of the tax demanded voluntarily
- Setting aside the impugned order and remitting the matter back to authorities

Analysis:

The petitioner raised the issue that despite requesting a personal hearing in their reply, the respondent did not provide this opportunity. The petitioner argued that a personal hearing is essential before passing an order, citing Section 27(3) of the TNVAT Act and a relevant judgment. The petitioner expressed readiness to deposit 20% of the tax demanded to demonstrate good faith. On the other hand, the Additional Government Pleader contended that the authorities had properly considered the petitioner's reply and supported upholding the impugned order.

Considering the necessity of a personal hearing and the limited tax liability involved, the court referred to the precedent cited by the petitioner and the voluntary offer to pay 20% of the tax demanded. Consequently, the court set aside the impugned order and remitted the matter back to the authorities. The petitioner was directed to make the 20% tax deposit with the respondent by a specified date. Failure to comply would empower the respondent to take legal action. Upon receipt of the payment, a personal hearing would be granted to the petitioner for further considerations. The respondent was instructed to issue appropriate orders within two months of receiving the payment.

The court concluded the judgment by disposing of the Writ Petition without imposing any costs. Additionally, the connected miscellaneous petition was closed as a result of the judgment.