2015 (3) TMI 392 - HC - VAT and Sales Tax

Violation of principles of natural justice - Opportunity of hearing not provided - Held that - As per Section 27 of Tamil Nadu Value Added Tax, 2006 (hereinafter referred to as the 2006 Act), an opportunity ought to have been given to the dealer before passing an order. Since the issue in question is an escaped turnover to be assessed under Section 27 of the 2006 Act, the petitioner ought to have been given a reasonable opportunity. However, having received the documentary evidence, without affording an opportunity of personal hearing, the authority passed the impugned orders dated 28.11.2014 relating to the assessment years 2007-2008 to 2013-2014, which are almost verbatim. In the assessment of the escaped turnover, the documentary evidence submitted by the petitioner has escaped the attention of the officer. Hence, I find force in the contention of the learned Senior Counsel for the petitioner that the impugned orders are passed without giving an opportunity to the petitioner. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenging orders dated 28.11.2014 for assessment years 2007-2008 to 2013-2014 - Violation of principles of natural justice in passing non-speaking orders without considering filed documents or providing an opportunity - Interpretation of Section 27 of Tamil Nadu Value Added Tax, 2006 Act - Application of principles from Andhra Pradesh High Court case regarding best judgment assessment.

Analysis:
The petitioner challenged orders dated 28.11.2014 for assessment years 2007-2008 to 2013-2014, alleging a violation of principles of natural justice as the respondent passed non-speaking orders without considering the documents submitted or granting an opportunity for a personal hearing. The Senior Counsel argued that the respondent confirmed the issue without proper consideration of documentary evidence, leading to an unacceptable reply. The Counsel referenced a decision from the Andhra Pradesh High Court emphasizing the necessity for a genuine effort in estimating turnover and providing a reasonable opportunity for the assessee to present their case before making a best judgment assessment.

The Court examined Section 27 of the Tamil Nadu Value Added Tax, 2006 Act, which mandates providing a dealer with an opportunity before passing an order. Considering the case as an assessment of escaped turnover under Section 27, the Court found that the petitioner should have been given a reasonable opportunity for a personal hearing. The Court noted that the impugned orders were passed without considering the documentary evidence submitted by the petitioner, highlighting a lack of attention by the assessing officer. Consequently, the Court agreed with the petitioner's contention that the orders were issued without affording a proper opportunity for a personal hearing.

Based on the legal provisions and the cited decision from the Andhra Pradesh High Court, the Court set aside the orders dated 28.11.2014 and directed the respondent to pass new orders on merits and in accordance with the law. The Court emphasized the necessity of providing a reasonable opportunity for a personal hearing, including a detailed enquiry before issuing new orders. Additionally, the Court allowed for different dates to be fixed for personal hearings for the seven assessment years, enabling the petitioner to present objections and submit additional documents to support their case. Failure to avail the opportunity may lead to the authority passing new orders without being influenced by the previously set aside orders.