2016 (11) TMI 549 - HC - VAT and Sales Tax

Taxable turnover - surprise inspection by Enforcement Wing - natural justice - Held that - there is an observation that in spite of a lapse of 46 days, the petitioner has not submitted his reply to the show cause notice. However, one important fact, which was lost sight of by the respondent is that the petitioner made a request for furnishing of copies of documents, which were seized by the officials of the Enforcement Wing. Therefore, without furnishing the copies sought for by the petitioner, the respondent could not have taken a stand that the petitioner was guilty of not submitting a reply to the show cause notice. For the above reasons, this Court holds that the impugned orders have been passed in violation of the principles of natural justice, as the petitioner did not have an opportunity to put forth his submissions. This is sufficient to hold that the impugned orders are unsustainable in law - appeal disposed off - matter on remand.

Summary

Issues:
Challenge to assessment orders for the years 2009-10 to 2015-16 under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner, a registered dealer, challenged assessment orders for multiple years following a surprise inspection that revealed defects. The petitioner received a show cause notice to explain the defects, and upon requesting copies of seized documents, approached the court for the return of seized cheques. The court ordered the return of cheques and communicated this to the respondent before the impugned orders were passed. However, the assessment orders did not acknowledge the petitioner's representation or the agreement to provide copies of documents upon payment. The court found a violation of natural justice as the petitioner was not given an opportunity to respond due to the failure to provide the requested documents. Consequently, the court set aside the impugned orders and remitted the matters back to the respondent for fresh consideration.

The court emphasized that the respondent must provide the copies of documents requested by the petitioner within two weeks of the order and allowed the petitioner to submit objections within 15 days thereafter. A personal hearing opportunity was also mandated before the respondent redoes the assessment in accordance with the law. The court concluded by closing the writ petitions without imposing any costs.