2017 (7) TMI 470 - HC - VAT and Sales Tax

Validity of assessment proceedings - the allegation against the petitioner is that the transaction effected by them were bogus transactions with bill traders - principles of natural justice - Held that - the petitioner was required to produce the books of accounts for the relevant year and if he complies with the condition there was a direction to the respondent to furnish the copies of the available documents on which the Assessing Authority proposed to rely in making an order of assessment - the respondent has not complied with the direction issued by the Tribunal though it is admitted that the petitioner had produced the books account as per the direction of the Tribunal. This is sufficient to hold that the impugned order is contrary to the direction issued by the Tribunal and consequently in violation of the principles of natural justice - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment order under TNGST Act for the year 1995-1996 based on technical grounds. Allegation of bogus transactions with bill traders. Petitioner's approach to Tamil Nadu Taxation Special Tribunal. Tribunal's directions regarding production of accounts and furnishing of documents. Non-compliance by the respondent. Violation of principles of natural justice.

Analysis:
The petitioner challenged an assessment order under the TNGST Act for the year 1995-1996 on technical grounds, alleging bogus transactions with bill traders. The petitioner approached the Tamil Nadu Taxation Special Tribunal seeking to set aside the proceedings of the respondent dated 30.11.1999. The Tribunal, in its order dated 17.12.1999, directed the petitioner to produce regular accounts for the relevant year by a specified date and allowed perusal of documents by the assessing authority. The Tribunal clarified that the petitioner was not entitled to copies of inter-Department correspondence. The respondent admitted that the petitioner complied with producing accounts but failed to furnish the directed documents, citing verification reports without clear explanation. This failure to comply with the Tribunal's direction led to the impugned order being deemed contrary to the principles of natural justice.

The High Court allowed the writ petition, setting aside the impugned order and remanding the matter back to the respondent for fresh consideration. The petitioner was directed to reappear before the respondent, produce the account books, and receive copies of the documents as directed by the Tribunal. The respondent was instructed to allow perusal of documents for which copies could not be provided and grant a specific timeframe for the petitioner to submit objections. Following the objections, the respondent was mandated to provide a personal hearing to the petitioner and conduct the assessment afresh in accordance with the law. No costs were awarded in this judgment.