2015 (12) TMI 916 - HC - VAT and Sales Tax

Levy of penalty under Section 9(2) of the CST Act read with 27 of the TNVAT Act - Suppression of sales - Held that - Respondent is directed to furnish the correct particulars and also other necessary documents namely the Chek-Post Register and Bill copies to the petitioner within a period of two weeks from the date of receipt of a copy of this order. On furnishing such particulars, the respondent is also directed to give an opportunity of personal hearing to the petitioner and pass appropriate orders, within a period of four weeks thereafter. - Decided in favour of assessee.

Summary

Issues: Assessment under self-assessment scheme, notice for estimated sales suppressions and penalty, denial of opportunity for adjudication, discrepancies in buyer's details, lack of opportunity for hearing.

Analysis:

The petitioner, a dealer in Coffee & Coffee seed, was assessed under the self-assessment scheme for the assessment year 2012-2013. Subsequently, a notice was issued proposing to assess estimated sales suppressions and levy penalties under relevant Acts. The notice highlighted a specific transaction involving the sale of apparatus for making Coffee-Espresso to a company, which the petitioner denied being related to his business. Despite the petitioner's explanation in a letter dated 15.06.2015, the reply was rejected, leading to the passing of the impugned order for assessment and penalty without providing an opportunity for proper adjudication.

The petitioner contended that the penalty was imposed without establishing willful non-disclosure of taxable turnover and without offering a chance for a show-cause. Moreover, discrepancies were noted in the buyer's details mentioned in the notice, as they did not align with the petitioner's company. The order referenced a different company, further complicating the matter. The petitioner emphasized the lack of a hearing before the impugned order was issued, raising concerns about the procedural fairness and natural justice principles.

After hearing both sides, the court found merit in the petitioner's contentions and set aside the impugned order dated 15.07.2015. The respondent was directed to provide correct particulars, including the check-post register and bill copies, to the petitioner within two weeks. Additionally, the respondent was instructed to grant a personal hearing to the petitioner and make appropriate orders within four weeks thereafter. The court's decision aimed to ensure procedural fairness, rectify discrepancies, and uphold the principles of natural justice in the assessment process.