2015 (4) TMI 743 - HC - VAT and Sales Tax

Demand of differential duty - Violation of principle of natural justice - No show cause notice issued - Held that - Court more pertinently points out the original reply dated 19.03.2014 and for the subsequent reply dated 18.07.2014 given by the Petitioner, addressed to the Respondent, the Respondent has not provided the detailed working sheet in respect of difference of tax of ₹ 99,14,199.01, claimed by the Department. In effect, it is candidly clear that the respondent till date had not complied with the requests of the Petitioner made in his reply dated 19.03.2014 and 18.07.2014. For non furnishing of detailed working sheet in regard to the difference of tax of ₹ 99,14,199.01, as claimed by the Respondent, this Court comes to an irresistible and inescapable conclusion that the impugned notices dated 10.03.2014 and 11.07.2014 are liable to be interfered with in the interest of justice for the simple reason that there has been a Negation of the principles of natural justice and accordingly, this Court interfere with the said impugned notices dated 10.03.2014 and 11.07.2014, issued by the Respondent, addressed to the Petitioner and sets aside the same in furtherance of substantial cause of justice. - Decided in favour of assessee.

Summary

Issues:
1. Legality of the notice issued by the Respondent demanding payment of tax difference and interest.
2. Violation of principles of natural justice and provisions of Tamil Nadu Value Added Tax Act, 2006.
3. Lack of adjudication before demanding payment.
4. Failure to provide a reasonable opportunity to the Petitioner.
5. Non-furnishing of detailed working sheet by the Respondent.
6. Interference of the High Court in the impugned notices.

Analysis:
The Petitioner filed a Writ of Certiorari challenging the legality of the Notice issued by the Respondent demanding payment of tax difference and interest. The Learned Counsel for the Petitioner argued that the Notice was illegal and arbitrary, violating principles of natural justice and the Tamil Nadu Value Added Tax Act, 2006. It was contended that demanding payment without prior adjudication was unlawful. The Petitioner highlighted the lack of a show cause notice before assessment and the failure of the Respondent to provide a working sheet for the claim made. The Petitioner repeatedly requested detailed workings for the tax difference but was not provided with the necessary information by the Respondent.

The Court noted that despite the Petitioner's replies requesting detailed workings for the tax difference, the Respondent did not comply. The Court found a clear negation of the principles of natural justice and concluded that the impugned notices were unjust. Consequently, the High Court interfered with the notices dated 10.03.2014 and 11.07.2014, quashing them in the interest of justice. The Writ Petition was allowed, and the Respondent was granted liberty to issue a fresh Notice, provided detailed workings for the claimed amount, and allow the Petitioner sufficient time to respond. The Respondent was directed to pass a reasoned order on merits within eight weeks from the date of the order, ensuring a fair and just process unaffected by the Court's observations.

In summary, the High Court found the Respondent's actions to be in violation of natural justice and set aside the impugned notices. The Court emphasized the importance of providing a fair opportunity to the Petitioner and directed the Respondent to proceed with the matter in a just and unbiased manner, adhering to the principles of law.