2016 (4) TMI 1103 - HC - VAT and Sales Tax

Validity of impugned order - Violation of principles of natural justice - No opportunity of personal hearing provided before passing the order - Held that - the petitioner was not given an opportunity of personal hearing by the 2nd respondent, which is violative of principles of natural justice, the impugned orders dated 27.01.2016 passed by the 2nd respondent are liable to be set aside and accordingly the same are set aside. The matters are remitted back to the 2nd respondent for fresh consideration. The 2nd respondent is directed to decide the appeals on merits and in accordance with law, after affording due opportunity of personal hearing to the petitioner. Demand of Tax - Engaged in business of providing service of passive telecommunication infrastructure to telecommunication companies - Held that - in view of the above, the demand notice issued by the 1st respondent is liable to be set aside and accordingly, the same is set aside. - Appeal disposed of

Summary

Issues:
1. Writs of certiorari for Impugned Orders in A.P.Nos.389 to 392/2014 dated 27.1.2016
2. Writs of certiorarified mandamus for Notice issued by 1st respondent in TIN 33040620433/2007-2008 to 2010-11 dated 11.03.2016

Analysis:
1. The petitioner, engaged in providing telecommunication infrastructure services, bought goods inter-state against Form-C for construction purposes. The petitioner claimed no property transfer to the contractor, asserting the contractor as the Seller and the petitioner as the Buyer in Works Contracts. The petitioner deducted TDS under Section 13 of TNVAT Act and remitted it to the department. However, the 1st respondent issued notices proposing tax levy on the petitioner, misinterpreting them as the Seller. Appeals filed by the petitioner were disposed of by the 2nd respondent, leading to a demand notice dated 11.03.2016. The petitioner contended that the impugned orders were passed without a hearing, violating natural justice principles.

2. The learned counsel for the petitioner argued that the impugned orders lacked a hearing opportunity, breaching natural justice principles. The learned Additional Government Pleader for the respondents agreed that the orders should be set aside due to the absence of a personal hearing for the petitioner. Consequently, the demand notice challenged in Writ Petitions of 2016 should also be annulled. The Court acknowledged the absence of a personal hearing for the petitioner, deeming it a violation of natural justice principles. Hence, the impugned orders were set aside, and the matters were remitted to the 2nd respondent for fresh consideration with a directive to afford a personal hearing to the petitioner.

3. Following the above decision, the demand notice issued by the 1st respondent on 11.03.2016 was also set aside. The Writ Petitions related to this issue were allowed, with the provision for the 1st respondent to reissue a demand notice after the 2nd respondent's appeals disposal. The Court concluded the judgment without imposing any costs, closing all connected miscellaneous petitions.