2014 (10) TMI 1035 - HC - VAT and Sales Tax

Revision of assessment order - opportunity of being heard not provided - violation of principles of natural justice - HELD THAT - While issuing the notice dated 30.12.2013 the respondent had stated that the petitioner/ dealer are given an opportunity of hearing and file their objections if any, within 15 days of the receipt of the notice. Further, the notices indicate that apart from the petitioner's right to file their objection, opportunity of being heard would also be afforded. Under normal circumstances, the first requirement is to file an objection/reply to show cause notice - Though there would have been an intention for giving personal hearing in the show cause notice, the personal hearing ought to be fixed by the respondent and not that the petitioner should seek for a personal hearing to produce the records, since it is a proposal to revise an assessment already made. Since there is violation of principles of natural justice this Court has to interfere with the revision order. The matter is remanded back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues:
Challenging orders of Assessment under TNVAT for multiple assessment years, Violation of principles of natural justice, Opportunity of personal hearing before revising assessment, Justification for revising assessment, Appeal provision not availed, Quashing and remanding the order for fresh consideration.

Challenging orders of Assessment under TNVAT:
The petitioner, a registered dealer under TNVAT and CST Act, challenged the revision of assessment orders for various years. The respondent proposed revisions based on defects found during a VAT audit, including issues like unexplained income, sales return claims, sales against Form 'C', and omitted turnovers. The petitioner objected to these revisions, emphasizing the need for a personal hearing before finalizing the assessment.

Violation of principles of natural justice:
The petitioner contended that the orders of assessment were passed without providing a personal hearing, despite the assurance of such an opportunity in the notice. Citing a circular mandating personal hearings before revising assessments, the petitioner argued for setting aside the orders due to a breach of natural justice principles.

Opportunity of personal hearing before revising assessment:
The court noted that the respondent should have granted a personal hearing after receiving the objections from the petitioner, as per Circular No. 07/2014. Emphasizing the importance of affording such an opportunity before revising an assessment, the court found a violation of natural justice principles and ordered a fresh consideration with a mandated personal hearing.

Justification for revising assessment:
The respondent defended the assessment revisions, stating that objections were considered, and the orders were justified. However, the court emphasized the procedural requirement of a personal hearing before finalizing revisions, highlighting the significance of following principles of natural justice.

Appeal provision not availed:
The respondent argued that the petitioner should have appealed instead of filing a writ petition directly. However, the court focused on the procedural irregularity of not providing a personal hearing, leading to the quashing of the orders and remanding the matter for reconsideration.

Quashing and remanding the order for fresh consideration:
In light of the procedural lapses and the necessity of a personal hearing, the court quashed the impugned order and remanded the case to the respondent for a fresh assessment. The court directed the respondent to conduct a personal hearing within three weeks, allowing the petitioner to present objections and records, and to issue a reasoned order within four weeks after the hearing.

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