2015 (4) TMI 1307 - HC - VAT and Sales Tax

Principles of Natural Justice - input tax credit reversed without giving any notice or opportunity to the petitioner - HELD THAT - A perusal of the five line impugned order does not whisper about the issuance of notice whatsoever to the petitioner. The learned Government Advocate for the respondent was unable to reply literally, as the impugned order does not indicate the issuance of any notice. Therefore the impugned order, which has been passed in violation of the Section 84 of the Tamil Nadu Value Added Tax Act mandating an opportunity of personal hearing, is set aside and the matter is remitted back to the respondent to pass a speaking order after giving an opportunity of personal hearing to the petitioner. Petition allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in passing an order without notice under the Central Sales Tax Act, 1956.

Analysis:
The petitioner filed a writ petition challenging the order passed by the Commercial Tax Officer, Bazaar Circle, Tirupur, which assessed the total and taxable turnover at Rs. 81,26,22,932.00 for the year 2012-13 under the Central Sales Tax Act, 1956, without providing any notice or opportunity for a personal hearing. The petitioner contended that the order violated the principles of natural justice, citing the requirement for notice under Section 84 of the Tamil Nadu Value Added Tax Act, 2006. The petitioner emphasized the necessity for notice, especially when an order enhances tax demand beyond the original assessment. The court noted that the impugned order did not mention issuing any notice to the petitioner, indicating a clear violation of procedural requirements.

Analysis:
The learned Government Advocate for the respondent acknowledged the lack of notice in the impugned order. The court observed that the absence of any mention of notice in the brief order highlighted the non-compliance with Section 84 of the Tamil Nadu Value Added Tax Act, which mandates an opportunity for a personal hearing. Consequently, the court set aside the impugned order and directed the matter to be remitted back to the respondent for a fresh decision after providing the petitioner with a proper opportunity for a personal hearing. The court emphasized the importance of adhering to procedural fairness and the principles of natural justice in tax assessments under relevant statutes.

Analysis:
In conclusion, the court allowed the writ petition, highlighting the necessity for procedural fairness and the right to a personal hearing in tax assessments. The court's decision to set aside the order and remit the matter back to the respondent underscored the significance of following statutory requirements, particularly in cases where tax demands are revised or enhanced. The judgment serves as a reminder of the importance of upholding principles of natural justice and providing affected parties with a fair opportunity to present their case before final decisions are made in tax matters.