2016 (9) TMI 22 - HC - VAT and Sales Tax

Reconciliation statement non-consideration opportunity of personal hearing - imposition of penalty under Section 27(3)(b) of the TNVAT Act Held that - when such complicated question of facts are involved that too when the assessments are sought to be reopened based on the report submitted by the Enforcement Wing Officials it is incumbent upon the respondent to afford an opportunity of personal hearing. Order passed without affording the opportunity of being heard. Objections preliminary and final objections non-consideration by assessing officer Held that - the matter would have attained finality before the respondent himself had the respondent given the opportunity of personal hearing and considered the reconciliation statement filed by the petitioner when admittedly the respondent has received the preliminary reply dated 08.06.2016 and final reply dated 14.06.2016 replies to be considered re-assessment to be done - petition allowed matter remanded decided in favor of petitioner.

Summary

Issues Involved:
Challenging assessment orders under TNVAT Act for multiple years, non-consideration of objections and reconciliation statements, alleged differences in turnover, levy of penalty under Section 27(3)(b).

Analysis:

1. Challenging Assessment Orders: The petitioner, a registered dealer under TNVAT Act and CST Act, challenged assessment orders for several years, claiming that their objections and reconciliation statements were not appropriately considered by the Assessing Officer.

2. Alleged Differences in Turnover: The impugned assessment orders were based on alleged differences in purchase and sales turnover as per balance sheets and monthly returns, as well as discrepancies in purchase details between the petitioner and the seller.

3. Non-Consideration of Reconciliation Statements: The petitioner contended that they had reconciled the turnover differences and provided details to support their claims, but the Assessing Authority did not consider the reconciliation statement, leading to an unfair assessment.

4. Principles of Natural Justice: The Court emphasized the importance of affording the petitioner a personal hearing and considering all relevant documents, including reconciliation statements, before finalizing assessment orders, especially in cases involving complex factual issues.

5. Levy of Penalty: The question of imposing a penalty under Section 27(3)(b) of the TNVAT Act was also raised, with the Court highlighting the need for a fair opportunity for the petitioner to contest such proposals without any estoppel.

6. Court's Decision: The Court found that the impugned assessment orders were passed in violation of natural justice principles due to the failure to consider the reconciliation statement and grant a personal hearing. Consequently, the Court allowed the Writ Petitions, set aside the orders, and remanded the matters to the respondent for fresh consideration, emphasizing the need for a fair process and adherence to the law.

7. Remedial Action: The Court directed the respondent to provide a personal hearing to the petitioner, consider all relevant replies and documents, including the reconciliation statement, and conduct assessments in accordance with the law. No costs were awarded in this matter.

This detailed analysis highlights the key legal issues, arguments presented, and the Court's decision in the judgment, focusing on the principles of natural justice and fair assessment procedures under the TNVAT Act.