2021 (7) TMI 1319 - HC - VAT and Sales Tax

Validity of Revision of Assessment - input tax credit - opportunity of hearing was not provided to the writ petitioner - violation of principles of natural justice - HELD THAT - This Court is of the considered opinion that the opportunity, if not provided, certainly a good ground for interference. However, the Appellate Authority is conferred with powers to annul or enhance or reduce or to remand the matter back to the Original Authority for fresh consideration. The proceedings of an appeal is the continuation of original proceedings and opportunity denied may be provided by the appellate authority and such an opportunity is to be availed by the Assessee for the purpose of defending their case. The very legislative intention for providing an appeal is to ensure that the procedural lapses, if any, would be considered and, if at all, the petitioner has no such opportunity, is to be provided to the satisfaction of the appeal in the Appellate Authority and even at that point of time, the assessee is at liberty to avail opportunity and submit their complete defense in order to establish their case. The powers conferred to the appellate authority to reduce, enhance, annul the assessment or to remand the matter back was taken care of the entire grounds raised by the petitioner, including the ground of violation of principles of natural justice, as it is contended that no opportunity was provided. Thus, entertaining a writ petition and setting aside the assessment as prayed for by the petitioner, deserves no merit consideration by this Court under Article 226 of the Constitution of India. The writ petitioner has to prefer an appeal as contemplated under the Act and Statutes. Petition disposed off.

Summary

Issues:
Challenge to Revision of Assessment under Tamil Nadu Value Added Tax Act, 2006 based on denial of opportunity of hearing and violation of principles of natural justice.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged the Revision of Assessment passed on 31.05.2016, alleging denial of opportunity of hearing, which is a violation of natural justice principles. The petitioner contended that the absence of a hearing opportunity renders the assessment order liable to be set aside. The court acknowledged that the absence of an opportunity for hearing is a valid ground for interference. However, it highlighted that the Appellate Authority possesses the power to annul, enhance, reduce, or remand the matter back to the Original Authority for fresh consideration. The court emphasized that the appellate proceedings are a continuation of the original proceedings, and any opportunity denied during the original assessment can be availed by the Assessee during the appeal process to defend their case effectively. The legislative intent behind providing an appeal mechanism is to rectify procedural lapses and ensure that the Assessee has the opportunity to present a complete defense.

The court noted that the powers vested in the appellate authority to modify the assessment, including annulling or enhancing it, adequately address the grounds raised by the petitioner, such as the violation of principles of natural justice due to the absence of an opportunity. Therefore, the court concluded that entertaining a writ petition to set aside the assessment, as requested by the petitioner, holds no merit under Article 226 of the Constitution of India. The court directed the petitioner to pursue the appropriate appeal process as per the Act and Statutes. Consequently, the court disposed of the writ petitions with no costs and closed the connected miscellaneous petitions.