2016 (7) TMI 441 - HC - VAT and Sales Tax

Validity of assessment order - petitioner was not afforded an opportunity of personal hearing - levy penalty under Section 27(3) of the TNVAT Act. - Held that - it is seen that the petitioner was not afforded an opportunity of personal hearing. On this ground alone, the petitioner is entitled to succeed. - he matter is remitted back to the first respondent for fresh consideration and while doing so, the first respondent shall take into consideration the reply given by the petitioner dated 30.9.2009 to the notice issued by the second respondent dated 9.9.2009 and after affording an opportunity of personal hearing, pass a reasoned order on merits and in accordance with law. - Decided in favor of petitioner.

Summary

Issues:
Challenge to re-assessment order and penalty notice under Tamil Nadu Value Added Tax Act, 2006.

Re-assessment Order Challenge:
The petitioner challenged the re-assessment order by the first respondent, arguing that it sought to reopen earlier proceedings that had already been finalized for the same assessment year. The petitioner contended that the first respondent, who became the Assessing Officer in 2014, could not reopen the turnover already determined at a specific amount. The petitioner's counsel pointed to an earlier assessment order to support this argument.

Response to Challenge:
The Additional Government Pleader for the respondents argued that the annual turnover for the relevant assessment year had exceeded a certain threshold, necessitating the petitioner to file a return. However, these proceedings were dormant until the first respondent took over and initiated appropriate actions after reviewing the files. The court noted that the assessment order challenged by the petitioner was based on self-assessment and did not reference the earlier show cause notice regarding the turnover threshold. Therefore, the court found that the first respondent was not barred from initiating the re-assessment proceedings.

Opportunity for Hearing:
The court observed that the petitioner was not given a reasonable opportunity for a personal hearing despite submitting objections previously. Due to this procedural lapse, the court held that the petitioner was entitled to succeed in their challenge to the re-assessment order.

Judgment and Directions:
The court allowed the petition challenging the re-assessment order, setting it aside and remitting the matter back to the first respondent for fresh consideration. The first respondent was directed to consider the petitioner's earlier reply and provide a personal hearing before passing a reasoned order within a specified timeline. The court also set aside the penalty notice in light of the decision on the re-assessment order, allowing the first respondent to proceed as per law.

This detailed analysis of the judgment highlights the key arguments, responses, and the court's reasoning behind setting aside the re-assessment order and penalty notice under the Tamil Nadu Value Added Tax Act, 2006.