2015 (12) TMI 848 - HC - VAT and Sales Tax

Denial of input tax credit - Revision of assessment - escapement of assessable taxable turnover - Held that - Petitioner filed an appeal challenging the assessment order before the authority concerned, but, beyond the limitation period of 60 days. The mandatory pre-deposit amount was also paid. Stating that the appeal is barred by limitation, the same was returned and hence, without any other remedy, the petitioner challenges the impugned order of assessment before this Court - The authority, without affording sufficient opportunity to the petitioner, passed the impugned order, despite specific request made by the petitioner on those lines. Originally, the assessment was completed on 31.10.2012, accepting the returns filed by the petitioner under Section 22(2) of the TNVAT Act. The said assessment was sought to be re-opened by the authority under Section 27 of the TNVAT Act, for escapement of assessment on the basis of the report filed by the Enforcement Wing authorities, which resulted in disallowance of sales return as well as reversal of ITC, which according to the learned counsel for the petitioner is not justifiable and the petitioner is entitled for the same. Apparently, without providing a reasonable opportunity to the petitioner of being heard the impugned order came to be passed. On this score itself, the impugned order is liable to be set aside. - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment order based on violation of principles of natural justice.

Analysis:
The writ petition was filed challenging the assessment order dated 27.06.2014 on the grounds of violation of principles of natural justice. The petitioner, a registered dealer under the TNVAT Act, contended that the assessment was reopened by the 1st respondent without affording sufficient opportunity to be heard. Despite specific requests made by the petitioner, the impugned order was passed without providing a reasonable opportunity for the petitioner to present their case. The assessment was reopened based on a report by the Enforcement Wing authorities, resulting in disallowance of sales return and reversal of Input Tax Credit (ITC), which the petitioner believed was unjustifiable. The court held that the impugned order was liable to be set aside due to the lack of opportunity for the petitioner to be heard.

The petitioner had filed an appeal challenging the assessment order before the authority concerned, but it was beyond the limitation period of 60 days. Although the mandatory pre-deposit amount was paid, the appeal was returned as barred by limitation. As a result, the petitioner had no other remedy but to challenge the assessment order before the High Court. The main contention was the violation of principles of natural justice, as the authority passed the impugned order without providing sufficient opportunity for the petitioner to present their case. The court emphasized that the impugned order was passed without affording the petitioner a reasonable opportunity to be heard, which was a clear violation of principles of natural justice.

In the final judgment, the High Court set aside the impugned order passed by the 1st respondent and remitted the matter back to the assessing authority for fresh consideration. The court directed the petitioner to file necessary objections along with all documentary evidence within two weeks from the date of receiving the order. The assessing authority was instructed to consider the objections and evidence, and pass appropriate orders on merits and in accordance with the law within six weeks, after affording the petitioner an opportunity for a personal hearing. Failure to comply with the directions would allow the respondent to pass appropriate orders. The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.