2018 (6) TMI 1638 - HC - VAT and Sales Tax

Validity of assessment orders - TNVAT Act - CST Act - petitioner did not submit their objections to the revision notices - HELD THAT - Admittedly, the revision notices issued by the respondent dated 05.9.2017 is sequel to the inspection conducted by the Enforcement Officer. The observations contained in the impugned orders are verbatim reproduction of the statement, which was prepared by the Enforcement Officer and refused to be signed by the authorized representative of the petitioner. If the Enforcement Officer directs the Assessing Officer to initiate action based on the findings, which they recorded during inspection, then in all fairness, the Assessing Officer should have forwarded the replies given by the petitioner vide emails dated 05.5.2017 and 15.5.2017 along with attachments. The respondent should have been put on notice by the Enforcement Officer about the stand taken by the petitioner earlier in the sworn statement, which was prepared by the Enforcement Officer, failing which, the action should be termed to be unilateral. The writ petitions are disposed of by directing the petitioner to treat the impugned assessment orders as show cause notices and submit their objections along with all enclosures and annexures, within a period of 15 days from the date of receipt of a copy of this order - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders under Central and State enactments based on inspection and sworn statement refusal, violation of principles of natural justice by not considering petitioner's replies, granting another opportunity to contest proceedings before the Assessing Officer.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, 2006, and the Central Sales Tax Act, 1956, filed writ petitions challenging assessment orders passed under both Central and State enactments. The impugned orders stemmed from an inspection at the petitioner's business premises by the Enforcement Officer, resulting in a sworn statement that the petitioner's representative refused to sign due to factual discrepancies. Despite the petitioner sending emails with replies and supporting documents, the Enforcement Officer did not respond. Subsequently, the Assessing Officer issued notices proposing to reject monthly returns and assess tax, to which the petitioner did not respond or attend the personal hearing granted.

The Court acknowledged the respondent's completion of assessments due to the petitioner's failure to avail the opportunity granted. However, the Court found a departure from the normal course necessary due to the factual circumstances. It noted that the observations in the orders were a verbatim reproduction of the refused sworn statement, which the Enforcement Officer should have forwarded along with the petitioner's replies. The Court emphasized that the Enforcement Officer should have informed the Assessing Officer of the petitioner's earlier stand for fairness, indicating a violation of natural justice principles.

Consequently, the Court directed the petitioner to treat the assessment orders as show cause notices, submit objections within 15 days, and participate in a personal hearing. The Assessing Officer was instructed to make an independent decision disregarding the Enforcement Officer's observations. The Court emphasized that coercive action should not be taken against the petitioner until fresh orders are passed. The judgment aimed to rectify the procedural shortcomings and ensure a fair opportunity for the petitioner to contest the proceedings before the Assessing Officer, emphasizing the importance of adherence to natural justice principles in such matters.