2016 (6) TMI 1479 - HC - VAT and Sales Tax

Validity of assessment order - opportunity of personal hearing was not granted - violation of principles of natural justice (audi alterem partem) - HELD THAT - In the impugned orders of assessment, the respondent proceeded to confirm the proposals of the Enforcement Wing officials. The manner, in which, the Assessing Officer proceeded to complete the assessment has been deprecated in several decisions pointing out that the Assessing Officer is an independent Authority and uninfluenced by any report or proposal, the Assessing Authority has to finalize the assessments after considering the objections and documents. Therefore, the respondent - Authority could not have stated that the proposals arrived by the officials of the Enforcement Wing have been confirmed. Rather, he should have concluded as to why the restriction of exemption only to 50% is justifiable and this should have been done by proper reasons. Since this has not been done, the petitioner is entitled to succeed. The impugned orders are set aside and the matters are remitted back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues:
Challenge to assessment orders for 2011-12 to 2013-14 due to lack of personal hearing opportunity.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act and Central Sales Tax Act, filed writ petitions to quash assessment orders for the mentioned years, citing the absence of a personal hearing opportunity as the sole ground for challenge. The petitioner claimed that despite submitting objections on 17.7.2015, the impugned orders were issued on 27.7.2015 without granting a personal hearing. However, the respondent contended that a personal hearing was provided on 22.7.2015, as mentioned in the impugned orders. The court noted discrepancies in statements regarding the personal hearing but relied on the respondent's assertion that the opportunity was granted, although the rejection of objections was based on the absence of documents.

The court observed that the Enforcement Wing officials partially accepted the petitioner's explanations during inspection but made an ad hoc estimation, treating 50% of the turnover as hank yarn sales without specific reasons for the rejection of the remaining 50%. Criticizing the Assessing Officer for merely confirming the Enforcement Wing's proposals, the court emphasized the need for independent assessment based on objections and documents, highlighting the Authority's duty to justify any restrictions on exemptions. As the assessment lacked proper reasoning, the court ruled in favor of the petitioner.

Consequently, the writ petitions were allowed, the impugned orders were set aside, and the matters were remitted to the respondent for fresh consideration. The respondent was directed to review the objections, provide a personal hearing, examine produced documents, and issue a reasoned order in compliance with the law. No costs were awarded, and the related matters were closed.