2016 (12) TMI 129 - HC - VAT and Sales Tax

Principles of natural justice - Held that - In the impugned assessment order, the respondent has stated that the reply given by the dealer is routine and general in nature and does not reflect the branch-wise and day-wise details and that the sales reported can be verified with the Bill Tallying System to ascertain the correctness. If such was the opinion of the respondent, then it is all the more a valid reason for the respondent to have called upon the petitioner for personal appearance and directed them to produce all the details, more particularly the Bill Tallying System. However, this has not been done. Therefore, the impugned order has to be held to be in violation of principles of natural justice. Matter is remanded to the respondent for fresh consideration, who shall afford an opportunity of personal hearing to the petitioner, produce all records and if necessary call for records, including Bill Tallying System and after making a thorough verification, consider the objections raised by the petitioner and thereafter redo the assessment - appeal allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in assessment order for the year 2014-15 under the TNVAT Act.

Analysis:
1. The petitioner, a registered dealer under the TNVAT Act running hotels in Salem District, challenged an assessment order for the year 2014-15, alleging a violation of natural justice principles due to the lack of a personal hearing opportunity.

2. The petitioner's counsel did not contest the assessment's merits but argued that the order breached natural justice principles by not granting a personal hearing, citing precedents like M/s RAJAM OFFSET PRINTERS and V.SELLADURAI v. CHIEF COMMISSIONER OF INCOME-TAX.

3. The respondent failed to provide a personal hearing despite the petitioner's request in their reply to the pre-revision notice, which explicitly sought a personal hearing if the Assessing Officer found the explanation unsatisfactory.

4. The High Court emphasized the importance of affording a personal hearing when requested, especially for clarifications, as highlighted in the SRC PROJECTS (P) LTD case, which the respondent failed to adhere to in this instance.

5. The impugned assessment order criticized the petitioner's reply as general and lacking detailed sales information, suggesting verification through the Bill Tallying System, yet failed to call for necessary details or provide a personal hearing, further violating natural justice principles.

6. Consequently, the High Court allowed the writ petition, set aside the impugned order, and remanded the matter to the respondent for fresh consideration, emphasizing the need for a personal hearing, thorough verification of records, including the Bill Tallying System, and a reassessment in compliance with the law.