2016 (12) TMI 693 - HC - VAT and Sales Tax

Maintainability of petition - alternative remedy of appeal - principles of natural justice - Held that - It is seen that the respondent has taken note of the C-Form declarations, which were produced by the petitioner along with the letter dated 27.10.2016. If that be the case, the respondent could have granted some more time or passed an order either accepting or rejecting the request for adjournment. This has not been done by the respondent. Thus, there has been a violation of the principles of natural justice in the manner, in which, the assessment has been completed - this Court is not inclined to set aside the impugned assessment order, as partial relief has been granted to the petitioner in the impugned proceedings and proposes to pass the following order, which will meet the ends of justice and also protect the interest of the Revenue (i) The petitioner is directed to treat the impugned assessment order dated 14.11.2016 as a show cause notice and submit their objections along with documents, within a period of 10 days from the date of receipt of a copy of this order (ii) On receipt of the objections, the respondent shall consider the same and pass a speaking order on merits and in accordance with law and (iii) Till such time, the demand for the tax, as quantified in the impugned order, shall be kept in abeyance. Petition disposed off.

Summary

Issues:
Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 and Central Sales Tax Act, 1956. Violation of principles of natural justice in completing the assessment.

Analysis:
The petitioner, a registered dealer under the relevant tax Acts, challenged an assessment order dated 14.11.2016 before the Madras High Court. Typically, a writ petition against an assessment order is not entertained due to the availability of an appeal remedy. However, in this case, the petitioner had requested time to provide necessary evidence due to a change in personnel handling the matter. Despite the petitioner's efforts to comply and seek additional time, subsequent revision notices were issued by the respondent. The respondent did not adequately consider the petitioner's requests and proceeded to pass the impugned order without granting further opportunities, leading to a violation of natural justice.

The High Court acknowledged the respondent's consideration of certain declarations provided by the petitioner but noted the lack of proper response or decision regarding the request for adjournment. Despite finding a procedural flaw, the Court did not set aside the assessment order entirely. Instead, it issued specific directions to address the situation fairly. The Court directed the petitioner to treat the assessment order as a show cause notice and submit objections with supporting documents within 10 days. The respondent was instructed to review the objections and issue a detailed decision in accordance with the law. Additionally, the Court ordered the tax demand specified in the impugned order to be put on hold until a final decision is made.

In conclusion, the High Court disposed of the writ petition with the outlined directions to ensure justice and protect the interests of both parties. No costs were awarded, and the related miscellaneous petition was closed accordingly.