2016 (10) TMI 899 - HC - VAT and Sales Tax

Validity of order of assessment - principles of natural justice - TNVAT Act, 2006 - CST Act, 1956 - application for revision of assessment u/s 84 of the State Act - Held that - this Court is of the view that the application under Section 84 of the State Act having been filed before the respondent, it is but appropriate for the respondent to dispose of the same on merits and in accordance with law and not merely reject it by a single line order stating that the order of assessment has been validly passed. The respondent shall take note of the petitioner s case that the notice proposing revision itself is based on the audit conducted by the office of the Accountant General and the assessment was completed ex parte upon failure of the petitioner to submit their objections. In such circumstances, the respondent shall consider the petitioner s application under Section 84 of the State Act effectively, peruse the documents, ascertain the genuineness of the transaction and then pass an order giving reasons. Petition allowed - decided in favor of petitioner by way of giving them one more opportunity of being heard and accepting the application u/s 84 of the act.

Summary

Issues: Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 for the year 2014-15; Allegation of initiation of proceedings based on audit conducted by the office of the Accountant General; Failure to respond to pre-revision notice; Pending application under Section 84 of the State Act for revision of assessment order.

In this case, the petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, 2006 and the Central Sales Tax Act, 1956, challenged the assessment order for the year 2014-15. The petitioner contended that the Assessing Officer was satisfied with the transactions, except for one chemical, and that the initiation of proceedings was influenced by an audit conducted by the office of the Accountant General. The petitioner received a pre-revision notice but failed to respond, leading to an ex parte assessment. The petitioner later filed an application under Section 84 of the State Act for revision, which remains pending. The Court noted that the application under Section 84 should be considered on its merits by the respondent, taking into account the petitioner's contentions regarding the audit influence and the need for a detailed examination of the transaction documents. The Court directed the respondent to afford a personal hearing, verify all particulars, seek clarifications if necessary, and pass an order within three weeks, refraining from coercive recovery actions until then.

Overall, the judgment emphasized the importance of considering the petitioner's application for revision under Section 84 of the State Act thoroughly and in accordance with the law. It highlighted the need for the respondent to review the documents, assess the genuineness of the transactions, and provide reasoned decisions. The Court directed the respondent to complete this process within three weeks, ensuring no coercive actions are taken against the petitioner during this period.