2016 (2) TMI 135 - HC - VAT and Sales Tax

Demand of tax on the basis of Customs Data without providing documents and opportunity to the assessee - TNVAT with CST - Held that - When such being the case, without furnishing the relied documents, the respondent cannot pass an order, which is against the principles of natural justice. The rights of the petitioner to offer explanation/objections would be prejudiced, if those documents are not furnished, despite specific request was made. This Court finds considerable force in the stand taken by the learned counsel appearing for the petitioner. - Matter remanded back.

Summary

Issues:
Challenging proceedings dated 30.09.2015 under TNVAT Act and CST Act.

Analysis:
The petitioner, a trader in Oil seeds and edible oil, challenged proceedings by the respondent demanding payment of tax and penalty based on an inspection report. The petitioner engaged in import of goods and High Seas sales, reporting them in returns. However, the respondent proposed to tax the transactions without providing details, leading to the impugned order. The petitioner argued they couldn't defend without access to documents forming the basis of the order. The Court noted the reliance on Customs Data by the respondent and emphasized the importance of providing these documents for natural justice. Consequently, the Court set aside the order and directed the respondent to furnish the Customs Department documents within two weeks. The petitioner must then appear with objections within a week, and the respondent must pass orders within four weeks, disregarding the Enforcement Wing report.

This judgment highlights the significance of due process and the right to defend oneself with access to relevant documents. The Court emphasized the principles of natural justice and the prejudice caused by not providing relied-upon documents to the petitioner. By setting aside the order and mandating the provision of Customs Department documents, the Court ensured fairness and the opportunity for the petitioner to present their case effectively. The timeline set for submission of objections and passing of orders aimed to expedite the resolution while maintaining procedural integrity. Overall, the judgment upholds the importance of transparency and access to information in legal proceedings, safeguarding the rights of the parties involved.