2017 (9) TMI 1727 - HC - VAT and Sales Tax

Penalty u/s 27 (3) (c) and another penalty u/s 27 (4) (2) - mismatch of purchase and sales - opportunity of personal hearing not provided - principles of Natural Justice - Held that - When the respondent Assessing Officer has passed the impugned order levying two penalties one under Section 27 (3) (c) and another under Section 27 (4) (2) of the Tamil Nadu Value Added Tax Act, 2006, the Assessing Officer ought to have given an opportunity of personal hearing - Also, a sum of ₹ 3,41,533/- has been found as balance tax due payable by the petitioner. Therefore, the respondents in my considered opinion, should have given the petitioner a reasonable opportunity to explain his case by appearing in person. As it had not been done so and the matter involves the appreciation of facts, the respondents are hereby directed to give the petitioner a chance of personal hearing within a period of two weeks from the date of receipt of a copy of this order and thereafter pass final order - petition allowed by way of remand.

Summary

Issues involved:
Challenge to assessment order by petitioner, mismatch of purchase and sales, excess reporting of purchase turnover, opportunity of personal hearing under Section 27 (3) (c), penalty under Section 27 (4) (2), failure to provide personal hearing, balance tax due, direction for personal hearing.

Analysis:
The writ petition challenges an assessment order dated 02.08.2017 passed by the Commercial Tax Officer, Karaikudi Assessment Circle. The petitioner responded to a pre-revision notice dated 02.05.2017, explaining the mismatch of purchase and sales by enclosing relevant bills. The petitioner argued that all documents were provided, and a personal hearing should have been granted to clarify any doubts. The petitioner contended that failure to provide a personal hearing led to prejudice and the declaration of a tax due of ?3,41,533. The petitioner requested an opportunity to address queries and challenge the penalties imposed under Section 27 (3) (c) and Section 27 (4) (2).

The Additional Government Pleader for the respondents argued that since the petitioner did not request a personal hearing initially, they could not contest the impugned order now. However, the Court noted that in cases where penalties were imposed, the Assessing Officer should have provided an opportunity for a personal hearing. The Court observed that the petitioner should have been given a chance to explain their case in person, especially regarding the balance tax due. Consequently, the Court directed the respondents to grant the petitioner a reasonable opportunity for a personal hearing within two weeks and then pass a final order.

In conclusion, the writ petition was disposed of with the direction for a personal hearing to be provided to the petitioner within a specified timeframe. No costs were awarded, and the connected miscellaneous petition was closed.