2016 (9) TMI 1574 - HC - VAT and Sales Tax

Validity of assessment order - violation of principles of natural justice - TNVAT Act - HELD THAT - The respondent examined the returns and appears to have once again made a verification/comparison with the data available in the Department web-site and came to the conclusion that the turnover reported by the petitioner in the monthly returns is lesser than the purchase details gathered from the Department web-site - the respondent should have given an opportunity to the petitioner to substantiate that the turnover reported by them in the return filed after the receipt of the pre-revision notices, is correct and if there are any discrepancies, the petitioner could have explained the same. Furthermore, even though the petitioner did not specifically seek for an opportunity of personal hearing, nothing prevented the Assessing Officer from calling upon the petitioner to appear before him and explain the discrepancies. However, this appears to have not been done and the assessment has been completed. This Court holds that the impugned orders have been passed in violation of principles of natural justice - Petition allowed.

Summary

Issues Involved:
Challenging assessment orders for multiple years under TNVAT Act based on violation of natural justice principles.

Analysis:
The petitioner, a Cement dealer, challenged assessment orders for three years under the TNVAT Act, alleging violation of natural justice principles. The respondent issued pre-revision notices for the years in question, indicating discrepancies between reported turnover and actual purchases. The petitioner explained the delay in filing returns due to health reasons and requested consideration of Input Tax Credit claims. The Court noted that the respondent should have allowed the petitioner to clarify discrepancies and failed to provide an opportunity for a personal hearing. Despite the violation of natural justice, the Court did not annul the orders but directed the petitioner to obtain details from the respondent, submit additional objections, and attend a personal hearing for reassessment. The respondent was instructed to conduct a fresh assessment within four weeks of receiving the objections, with no coercive action against the petitioner during the process.

This judgment highlights the importance of adhering to principles of natural justice in assessment proceedings under the TNVAT Act. It emphasizes the right of the petitioner to explain discrepancies and be heard before finalizing assessments. The Court's decision to allow the petitioner to submit additional objections and attend a personal hearing ensures a fair opportunity for the petitioner to present their case and rectify any errors in the assessment process. The directive to the respondent to conduct a fresh assessment based on the additional objections provided by the petitioner demonstrates the Court's commitment to upholding procedural fairness and ensuring a just outcome in tax assessment matters.