2016 (6) TMI 948 - HC - VAT and Sales Tax

Challenge to the revised assessment orders pursuant to Audit Inspection - TNVAT - no opportunity was granted to the petitioner - revision of the turnover and re-determination of the taxable turnover on grounds not pointed out in the show cause notices - Held that - It has to be pointed out that in the show cause notices, though there was a proposal to disallow and assess the related documents at appropriate rates, there was no specific direction for production for records which were referred to in the impugned order. In any event, the petitioner sought for time to produce the records and their definite plea is that their turnover is below the turnover prescribed under the Act and they have not collected tax or availed input tax as contemplated under the Act and they have not effected any inter-state purchase. That apart, the specific request made by the petitioner for an opportunity of personal hearing, has also not been granted. This amounts to violation of the Circular issued by the Commissioner - Matter remanded back. - Decided in favor of assessee.

Summary

Issues:
Challenge to revised assessment orders under Tamil Nadu VAT Act, 2006 for multiple years based on lack of opportunity and revision of turnover without specific grounds in show cause notices.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu VAT Act, challenged revised assessment orders for various years, primarily on grounds of lack of opportunity and revision of turnover without specified grounds in show cause notices. The petitioner contended that they had paid tax at a compounding rate under the Act and had not collected tax, availed input tax, or made inter-state purchases. The respondent's Assessing Officer re-determined the turnover and collected tax without considering the petitioner's objections or documentary evidence. The court noted that the petitioner had requested a personal hearing, which was not granted, violating principles of natural justice as established in relevant Circulars and judicial precedents.

The court observed that the Assessing Officer did not specify the documents to be produced despite the petitioner's request for time to provide necessary records. The failure to grant a personal hearing, as per Circulars and judicial decisions, was deemed a violation of natural justice. Citing a previous Division Bench decision, the court emphasized the importance of granting a personal hearing when proposing adverse findings against a dealer. Consequently, the impugned orders were set aside, and the show cause notices were directed to be reconsidered, allowing the petitioner to submit further replies, documents, and appear for a personal hearing. The court mandated that a speaking order be passed after considering the petitioner's submissions and evidence, ensuring compliance with the law.