2017 (2) TMI 44 - HC - VAT and Sales Tax

Refund claim - revision of assessment - natural justice - Held that - reliance placed in the case of SRC Projects Private Limited Versus Commissioner of Commercial Taxes, Chennai and another 2008 (9) TMI 914 - MADRAS HIGH COURT , where it was held that the impugned order by way of revision of assessment should not have been passed without giving the assessee an opportunity of personal hearing. The respondent should have given an opportunity of being heard to the petitioner before passing the revision of assessment order and in absence of the same, this Court has no hesitation to hold that the order impugned is not a sustainable one and hence the impugned order is quashed and the matter is remanded back to the respondent for reassessment - appeal allowed by way of remand.

Summary

Issues:
1. Validity of reassessment order and refund calculation.
2. Lack of opportunity for personal hearing and production of records.
3. Compliance with legal requirements for reassessment.

Issue 1: Validity of reassessment order and refund calculation
The petitioner, a Civil Contractor, was reassessed by the respondent for the assessment year 2009-2010, leading to a revised refund amount. Despite objections and requests for personal hearing and record production, the respondent passed a final reassessment order on 28.03.2013, refunding only a fraction of the previously determined amount. The petitioner challenged this order as arbitrary and incorrect, emphasizing the lack of opportunity for a fair hearing and proper calculation. The court noted the discrepancies in the reassessment process and the failure to adhere to legal requirements for reassessment, ultimately quashing the impugned order and remanding the matter back to the respondent for reassessment within two months.

Issue 2: Lack of opportunity for personal hearing and production of records
The petitioner raised objections to the second revision notice, expressing readiness to produce relevant records and requesting a personal hearing. However, the respondent proceeded with the reassessment without granting the petitioner a chance to be heard or present the necessary documents. The court highlighted the mandatory nature of providing a personal hearing in cases of reassessment, especially when requested by the assessee. Citing a Division Bench judgment, the court emphasized the importance of affording such an opportunity before finalizing a reassessment order. Consequently, the court found the lack of a personal hearing to be a critical flaw in the reassessment process, leading to the quashing of the impugned order.

Issue 3: Compliance with legal requirements for reassessment
The court analyzed the legal framework governing reassessment procedures and reiterated the necessity of adhering to due process, including providing a fair opportunity for the assessee to present their case. By referring to a previous judgment, the court emphasized the significance of a personal hearing in reassessment matters. In light of these legal principles, the court concluded that the respondent's failure to grant a personal hearing to the petitioner rendered the reassessment order unsustainable. The court directed the respondent to conduct a reassessment in accordance with the law, ensuring that the petitioner is given a fair chance to be heard and present relevant records during the process.

This detailed analysis of the judgment highlights the key issues raised, the arguments presented by both parties, and the court's decision based on legal principles and precedents.