2017 (9) TMI 1419 - HC - VAT and Sales Tax

Natural justice - Job Work Charges - Liability under Section 13 of the Act - Held that - if the opportunity of personal hearing had been granted to the petitioner, then, the entire material could have been thrashed out before the respondent without giving room for any presumptions or assumptions. In the counter affidavit filed by the respondent, it is admitted that the petitioner has purchased materials in their name. If such is the position, then, the issue would be as to whether the findings recorded by the respondent are correct. Penalty u/s 27 (3) and (4) of the Act - Held that - it is admitted by the respondent even in the revision notice, dated 14.09.2015, that the entire details have been culled out from the balance sheet and other documents produced by the petitioner - penalty set aside. The findings rendered by the respondent, in both the impugned assessment orders under the head Job Work Charges and Liability under Section 13 of the TNVAT Act are set aside and the matter is remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment orders for the years 2010-11 and 2011-12 regarding Job Work Charges and Liability under Section 13 of the TNVAT Act.

Analysis:
The petitioner, a registered dealer, challenged assessment orders for 2010-11 and 2011-12 under TNVAT Act and CST Act, focusing on Job Work Charges and Liability under Section 13. The respondent proposed assessing certain turnovers due to lack of relevant records for job work and construction activities. The petitioner objected, providing details of job work payments and fixed assets alterations, arguing against TDS deductions. The court noted the lack of opportunity for personal hearing and misinterpretation of documents by the respondent, leading to incorrect conclusions. The respondent admitted the petitioner's material purchases but failed to consider all evidence before making assessments.

The court found the lack of personal hearing deprived the respondent of crucial information, leading to presumptions and incorrect assumptions. The respondent's insistence on missing records without prior notice was deemed unfair. The court highlighted the need for a fair opportunity for the petitioner to present evidence and clarify objections. The respondent's basis for penalty levy was found unjustified, as the details were sourced from documents provided by the petitioner. Consequently, the court partially allowed the writ petitions, setting aside the findings on Job Work Charges and Liability under Section 13, remanding the matter for fresh consideration. The petitioner was granted the opportunity to submit affidavits, documents, and receive a personal hearing for a fair reassessment. The court also nullified the penalty levy, emphasizing the respondent's error in penalty imposition.