2016 (10) TMI 1001 - HC - VAT and Sales Tax

Validity of order of assessment - large tax payers unit - dealer who falls within the jurisdiction of a large tax payers unit has been dealt with in an arbitrary and unreasonable manner in the matter of production of C-Forms - Held that - this Court is of the view that the assessment should be redone and the petitioner should be afforded an opportunity of personal hearing, moreso, when the petitioner would now take a stand that they have received C-Forms from their clients who are all registered dealers. In the impugned order, the respondent has not disputed the fact that the petitioner s clients are registered dealers in other States. Further, the petitioner has questioned the formula which has been adopted for reversal of the Input Tax Credit. Adequate opportunity having not been granted to the petitioner, the impugned order is held to be in violation of principles of natural justice - Writ Petition allowed - the impugned order set aside - matter remanded to the respondent for fresh consideration, who shall afford an opportunity of personal hearing, after receiving the C-Forms that may be produced by the petitioner and redo the assessment in accordance with law.

Summary

Issues:
Challenge to assessment order under TNVAT Act and CST Act for the assessment year 2014-15. Allegation of arbitrary treatment in the matter of production of C-Forms. Violation of principles of natural justice in passing the impugned order without affording an opportunity of personal hearing.

The petitioner, a registered dealer under TNVAT Act and CST Act, challenged the assessment order for the year 2014-15. The Court noted that the dealer, falling under a 'large tax payers unit,' was treated arbitrarily regarding the production of C-Forms. Referring to a previous judgment, it was emphasized that benefits should not be denied due to belated C-Forms submission. The respondent's hurried action was criticized, especially for confirming the proposal without a personal hearing despite the petitioner's request for the same.

The Court highlighted the importance of affording natural justice principles in such cases. The respondent's confirmation of the proposal without proper consideration was deemed inadequate. Notably, the petitioner had filed an appeal before the Joint Commissioner (CT) Appeal, Chennai, regarding the revision of assessment under the CST Act, which was still pending. The Court directed a redo of the assessment, emphasizing the need for a personal hearing and the submission of C-Forms by the petitioner for fresh consideration. The impugned order was set aside, and the matter was remanded to the respondent for a lawful reassessment process.