2013 (3) TMI 277 - HC - VAT and Sales Tax

Assessment of tax - officials of the Enforcement Wing conducted a spot inspection at the petitioner s business premises - assessee contested against demand as no sufficient opportunity was given before concluding the impugned assessment proceedings - TNVAT Act - Held that - Writ Petition allowed by setting aside the impugned proceedings dated 7.1.2013 of demanding of tax and the penalty due which was only on the basis of the single notice, notwithstanding the fact that the petitioner had always been prompt and diligent in their transactions with the Department in the past. Also the respondent erred in solely relying upon D-3 proposals of the Enforcement Wing officials without independent application of mind. Matter remanded to the respondent for fresh consideration after giving a reasonable opportunity of hearing to the petitioner-Company.

Summary

Issues:
Challenge to assessment proceedings under the TNVAT Act for the assessment year 2011-2012.

Analysis:
The petitioner, a company dealing in electronic goods, challenged the assessment proceedings of the respondent under the TNVAT Act for the assessment year 2011-2012, which imposed tax and penalty. The petitioner contended that they were not given sufficient opportunity before the assessment was concluded, and the proceedings were solely based on the Enforcement Wing officials' proposals without independent assessment. The petitioner argued that they had always been diligent in their transactions with the Department. The respondent, through the Government Advocate, acknowledged the necessity of providing an opportunity and agreed to reconsider the matter if remanded. The petitioner highlighted the lack of opportunity to explain their case before the tax and penalty assessment in the impugned proceedings, seeking to set aside the proceedings.

The petitioner, registered as a dealer in electronic goods, underwent an audit by the Enforcement Wing officials, leading to the assessment of tax and penalty for the assessment year 2011-2012. The respondent's conclusion in the impugned proceedings indicated the total turnover, total tax due, tax already paid, balance tax, and penalty imposed. The petitioner had not paid the penalty as mentioned in the proceedings. The petitioner contended that the assessment proceedings were flawed due to insufficient opportunity provided to them before determining the tax and penalty. The Court noted the petitioner's plea and allowed the Writ Petition, setting aside the impugned proceedings and remanding the matter to the respondent for fresh consideration. The Court directed the respondent to conduct the assessment proceedings in compliance with the law, ensuring a reasonable opportunity for the petitioner to be heard promptly. No costs were awarded, and the Miscellaneous Petitions were closed.