2017 (6) TMI 1287 - HC - VAT and Sales Tax

Revision of assessment - whether the manner in which the Assessing Officer proposed to revise the assessment is proper? - principles of natural justice - Held that - Admittedly, the proposal to revise the assessment was based upon an inconsistency between Annexure I, return filed by the petitioner dealer and that of the other end dealers in Annexure II. This very issue was considered by one of us (T.S.S,J.) in the case of JKM Graphics Solutions Private Limited Vs. Commercial Tax Officer, Vepery Assessment Circle, Chennai 2017 (3) TMI 536 - MADRAS HIGH COURT . In the said batch of cases, the question arose as to how such revision of assessment could be made when there is inconsistency or discrepancy between Annexure I and II, when the Assessing Officer gathers information from the official website of the Commercial Tax Department, and it was held that Admittedly, the Assessing Officer did not follow the procedure which was directed to be adhered to in the said decision. This would be sufficient to hold that the petitioner had no effective opportunity to put forth his objection as the Pre-Assessment Notice was bereft of particulars. Consequently, the impugned Assessment Orders are flawed - The second mistake committed by the Assessing Officer is, not affording an opportunity of personal hearing. The petitioner dealer did not have adequate opportunity to put forth his objections and the impugned Assessment Orders are vitiated on the ground of violation of Principles of Natural Justice - petition allowed.

Summary

Issues:
1. Challenge to conditional interim order granted by Single Judge.
2. Listing of Writ Petitions along with Appeals due to narrow compass issue.
3. Challenge to assessment orders under Tamil Nadu Value Added Tax Act, 2006.
4. Issuance of demand notices by Assessment Officer.
5. Allegation of incorrect returns by petitioner dealer.
6. Proposal to reverse Input Tax Credit for multiple assessment years.
7. Request for personal hearing and documents ignored by Assessing Officer.
8. Revision of assessment based on inconsistency between Annexure I and II.
9. Interpretation of statutory provisions regarding tax credit entitlement.
10. Procedural flaws in assessment process.
11. Lack of opportunity for petitioner to present objections.
12. Violation of Principles of Natural Justice.
13. Setting aside of Assessment Orders and remand for fresh consideration.
14. Setting aside of Demand Notices with liberty to proceed in accordance with law.
15. Closure of Writ Appeals with no order as to cost.

Analysis:
The judgment involved a challenge to a conditional interim order granted by a Single Judge, leading to the listing of Writ Petitions along with Appeals due to a narrow compass issue. The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, 2006, faced allegations of incorrect returns by the Assessment Officer, resulting in the issuance of demand notices. The Assessing Officer proposed to reverse Input Tax Credit for multiple assessment years based on inconsistencies between Annexure I and II, which was found to be flawed due to procedural errors. The court referenced previous decisions emphasizing the importance of following proper procedures and affording opportunities for personal hearings. The judgment highlighted the violation of Principles of Natural Justice, leading to the setting aside of Assessment Orders and remand for fresh consideration, with specific directives for the Assessing Officer to conduct a thorough inquiry and provide a fair opportunity for the petitioner to present objections. The Demand Notices were also set aside with instructions to proceed in accordance with the law. The Writ Appeals were closed with no order as to cost, concluding the legal proceedings.