2016 (12) TMI 130 - HC - VAT and Sales Tax

Revision of assessment - principles pf natural justice - Held that - Firstly, the respondent should have dealt with the petitioner s representation, dated 22.04.2013. In the representation, apart from the fact that the petitioner has given certain explanation and requested time for production of the declaration forms. Apart from that specifically, they sought for personal hearing. The Hon ble Division Bench of this Court in several decisions has held that when a request is made by the dealer for grant of opportunity of personal hearing, it should be granted. Therefore, whether it is a revision of assessment under Section 22(4) or 27(4), when there is a request made by the dealer for personal hearing, the Assessing Officer should grant the same. The reason being that it will facilitate in the Assessment Proceedings and ensure that correct rate of taxes are recovered by the Department. This having not been is sufficient to hold that the impugned orders are in violation of the principles of natural justice. With regard to furnishing of C Forms and F Forms and other declaration forms, time and again, this Court has held that these forms are produced by the dealers only to avail the concessional rate of tax and there may be various reasons as to why the dealer cannot produce the forms within a time frame and the dealer should not be prevented from producing the form as and when they are able to secure the same, as it has to be furnished by the other end dealer. The impugned orders are in violation of principles of natural justice. Accordingly, these Writ Petitions are allowed and the impugned orders are set-aside and the matters are remanded to the respondent for fresh consideration with a direction to the respondent to accept C Forms and F Forms and other declarations, which are available with the petitioner and it should be produced by the petitioner within a period of four weeks.

Summary

Issues:
Challenging assessment orders under TNVAT Act for 2007-2008 to 2012-2013; Non-consideration of representation by respondent; Revision of assessment under Section 22(4) without personal hearing opportunity; Non-furnishing of "C" Forms and "F" Forms within three months; Violation of natural justice principles.

Analysis:
The petitioner, a private limited company, challenged assessment orders under the TNVAT Act for several years. The petitioner contended that the respondent did not consider their representation dated 22.04.2013 and revised the assessment under Section 22(4) without providing a personal hearing opportunity. The respondent argued that the forms were not furnished within the stipulated three months and that Section 27 does not require a personal hearing.

The Court noted that the respondent failed to address the petitioner's representation adequately. It emphasized that when a dealer requests a personal hearing, it should be granted to ensure fair assessment proceedings. The Court cited previous decisions mandating personal hearing upon request, regardless of the specific revision section. Failure to grant a personal hearing was deemed a violation of natural justice principles.

Regarding the non-furnishing of "C" Forms and "F" Forms within the prescribed time frame, the Court highlighted that dealers should not be restricted from submitting these forms later, as they are crucial for tax concessions and may be obtained from other dealers. A Circular by the Commissioner of Commercial Taxes allowed acceptance of forms beyond three months, considering the dealer's conduct. Since the respondent did not label the petitioner as a chronic defaulter, the Court found the rejection of forms unjustified.

Consequently, the Court ruled in favor of the petitioner, setting aside the impugned orders and remanding the matters to the respondent for fresh consideration. The respondent was directed to accept the outstanding forms from the petitioner within four weeks and provide a personal hearing opportunity before reassessing in compliance with the law. The Court concluded that the impugned orders violated natural justice principles and closed the case without costs.