2017 (7) TMI 315 - HC - VAT and Sales Tax

Natural justice - The petitioner s contention is that the impugned order has been passed without issuing any notice and without affording an opportunity of personal hearing - Held that - The change of officer cannot be a reason for violating the procedure required to be followed under the TNVAT Act. The principles of natural justice requires that the dealer is given adequate and reasonable opportunity to putforth their submissions. The earlier notice clearly stated that the petitioner will have an opportunity of personal hearing - matter is remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Challenge to reversal of input tax credit under TNVAT Act without proper notice and opportunity of hearing.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged the reversal of input tax credit by the respondent without issuing a notice or providing an opportunity for a personal hearing. The petitioner had objected to the reversal, stating they regularly reversed ITC on stock transfers made outside Tamil Nadu as required by law. Despite the petitioner's objections and request for a personal hearing, the respondent passed the impugned order without considering the earlier notices and objections. The court noted that the Assessing Officer's actions were in violation of the principles of natural justice, as the petitioner was entitled to a fair opportunity to present their case. The court found the impugned order to be illegal, arbitrary, and ordered it to be set aside.

The court emphasized that the change of officer at the Large Tax Payers Unit could not justify bypassing the procedural requirements under the TNVAT Act. The principles of natural justice mandate that a dealer must be given a reasonable opportunity to present their case, including a personal hearing if requested. The court highlighted that the earlier notice explicitly mentioned the petitioner's right to a personal hearing, which was disregarded in the impugned order. The court concluded that the respondent's actions were unjustified and ordered the matter to be remanded for fresh consideration. The respondent was directed to thoroughly review the records, issue a comprehensive notice, allow the petitioner to submit objections, conduct a personal hearing, and deliver a reasoned order in compliance with the law within twelve weeks.

In conclusion, the court allowed the writ petition, set aside the impugned order, and remanded the matter to the respondent for a fair reconsideration process. The court's decision aimed to ensure that the petitioner's rights were upheld, and the legal procedures under the TNVAT Act were followed diligently. The court did not award any costs in this matter, and the connected miscellaneous petition was closed as a result of the judgment.