2016 (12) TMI 259 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act, 2006 - objections given to the pre-revision notice, not considered - Held that - This Court has time and again pointed out that it is high time that the Commercial Taxes Department shall dispense with the procedure of giving acknowledgment in Letter Delivery Book as there is always room for complaints and grievances. It is not known as to why the Commercial Taxes Department, which is insisting upon filing E-Returns by the dealers, is adopting a procedure of giving acknowledgment in Letter Delivery Book , which is an archaic and an old practice and it is high time, the Department shall abandon the same and give proper electronically generated acknowledgment. The petitioner was issued with notice dated 18.5.2016 and in the affidavit filed in support of the Writ Petition, in paragraph No.8, it is submitted that the petitioner s representatives appeared before the respondent and represented that they have submitted their reply to the earlier notices and the respondent stated that he would revert after reviewing the entire set of documents. However, the respondent passed the impugned order on the ground that the petitioner has not submitted any objections - this Court is inclined to believe the stand taken by the petitioner that the reply dated 20.02.2015 was received by the respondent on 26.2.2015 in terms of the endorsement made in the Letter Delivery Book and therefore holds that the impugned order is in violation of principles of natural justice. Therefore, the impugned order has to be held to be illegal - the petitioner is directed to treat the impugned proceedings as a show cause notice and submit further objections within a period of fifteen days from the date of receipt of a copy of this order - petition disposed off - matter on remand.

Summary

Issues:
Challenge to an order of assessment under the TNVAT Act for the year 2013-14 based on objections not considered properly.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged an assessment order for the year 2013-14, claiming the order was passed without due consideration of objections to the pre-revision notice. The pre-revision notice was dated 21.01.2015, and the petitioner submitted objections on 20.02.2015, along with relevant documents such as returns, audit reports, and statements of turnovers. The petitioner provided evidence that the objections were received and acknowledged by the respondent on 26.2.2015, as shown in the 'Letter Delivery Book.'

The Court criticized the practice of obtaining acknowledgment in a 'Letter Delivery Book,' urging the Commercial Taxes Department to adopt electronic acknowledgments instead. Despite the petitioner's submission of objections and the respondent's acknowledgment, the impugned order was passed on the grounds of non-submission of objections. The Court held that the order violated principles of natural justice and deemed it illegal.

As a remedy, the Court directed the petitioner to treat the impugned proceedings as a show cause notice, requiring the submission of further objections within fifteen days. The respondent was instructed to provide a personal hearing and redo the assessment in compliance with the law. Consequently, the recovery of tax and penalties specified in the impugned order was stayed pending the fresh assessment based on the Court's directions. The Writ Petition was disposed of with no costs, and the connected Miscellaneous Petition was closed.