2017 (7) TMI 313 - HC - VAT and Sales Tax

Principles of Natural justice - application filed under section 84 of the TNVAT Act for rectification of the order of assessment not considered - Held that - it is evidently clear that the petitioner did not have an opportunity to putforth their objections to show cause as to why a deduction of a sum of ₹ 26,56,749/- is not sustainable. In the impugned order, the respondent has admitted the fact that the petitioner has filed a petition under section 84 of the TNVAT Act requesting to revise order of assessment in the year 2013-14 and accepting the Form C and Form F declaration, revision order was passed for the said year by order dated 14.06.2016 resulting in balance of tax due of ₹ 3,95,18,210/- - the matter is remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
1. Delay in processing refund application under TNVAT Act.
2. Assessment orders for various years challenged under TNVAT Act and CST Act.
3. Adjustment of refund against tax due under CST Act without prior notice.
4. Violation of principles of natural justice and failure to provide opportunity to be heard.
5. Alleged unsustainable deduction due to mismatch between Annexure I and II.
6. Failure to follow directions issued by the Court in previous cases.
7. Remand of the matter for fresh consideration.

Analysis:
1. The petitioner, a registered dealer under TNVAT Act and CST Act, filed a refund application for zero-rated sales from January 2014 to February 2014. The application was pending for two years while an assessment order for 2013-14 was passed without considering the refund claim. Subsequently, applications were filed for rectification and directions were sought from the Court regarding the refund application.

2. The Court disposed of the petitions challenging assessment orders for various years, directing the petitioner to file under Section 84 of the TNVAT Act and affording an opportunity for a personal hearing. No coercive action was to be taken until fresh orders were passed.

3. A separate order addressed the challenge against adjusting the refund claim against the tax due under the CST Act. The petitioner contended a violation of natural justice principles, citing the need for a hearing before such adjustments. The Court was referred to previous cases where deductions were deemed unsustainable.

4. The impugned order was found to lack an opportunity for the petitioner to present objections, especially in light of previous directions from the Court for fresh consideration. The matter was remanded for reconsideration to ensure compliance with natural justice principles and previous Court orders.

5. The Court emphasized the importance of providing a fair opportunity for the petitioner to be heard and present objections. The impugned order was set aside, and the respondent was directed to issue a fresh show cause notice, allowing the petitioner to file objections within a reasonable time for further consideration alongside matters remanded for fresh review.