2017 (7) TMI 548 - HC - VAT and Sales Tax

Principles of Natural Justice - the petitioner was instructed to furnish the copy of the audited balance sheet along with trading and profit & loss account statement for the relevant years along with the income tax statement, it was alleged that the petitioner has not produced any of the documents as directed - Held that - the petitioner was afforded an opportunity of personal hearing, in which they were instructed to produce certain documents, the Assessing Officer could have granted one more opportunity to enable the petitioner to produce those documents - since the matter pertains to five assessment years commencing from the year 2011-2012, this Court is of the view that reasonable opportunity should be granted to the petitioner to submit the documents, which they are in possession to enable the Assessing officer to take a decision on the merits rather than to make a best of Judgment assessment - appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment orders under TNVAT Act for 2011-2016 - Reversal of Income tax credit on inter-state purchases - Failure to produce required documents - Denial of opportunity for submission - Validity of impugned assessment orders.

Analysis:
The petitioner, a registered dealer in the business of Automobile and Spare Parts, challenged assessment orders for 2011-2016 under TNVAT Act. The petitioner, a retailer of M/s.Honda Motor India Private Limited, claimed goods were stock transferred from Uttar Pradesh to Tamil Nadu and sold within Tamil Nadu. The respondent issued a show cause notice proposing to reverse Income tax credit on inter-state purchases. The petitioner objected and sought a personal hearing, but the assessment orders were passed before the objections were submitted. The impugned orders stated the petitioner failed to produce required documents, leading to the confirmation of the proposal.

The petitioner argued they were granted time to produce documents until a specific date, but due to the unavailability of the respondent, they were unable to do so. An affidavit by the petitioner's partner supported this claim. The court noted the petitioner was given a personal hearing and should have been granted another opportunity to submit the necessary documents. Considering the multiple assessment years involved, the court emphasized the importance of providing a reasonable opportunity for the petitioner to present the required documents to avoid a best of Judgment assessment.

Consequently, the court allowed the Writ Petitions, set aside the impugned orders, and remanded the matters to the respondent for fresh consideration. The respondent was directed to schedule a personal hearing within 15 days, allowing the petitioner to produce documents and make oral submissions. The respondent was instructed to pass a speaking and reasoned order, completing the assessment in accordance with the law. The Writ Petitions were allowed with the specified directions, and connected Miscellaneous Petitions were closed without costs.