2018 (1) TMI 907 - HC - VAT and Sales Tax

Validity of assessment order - Section 3(4)(b) of the TNVAT Act, 2006 - the petitioner contended that they did not have adequate opportunity to produce the documents namely purchase bills and prayed for one more opportunity to place all the materials before the Assessing Officer - principles of Natural Justice - Held that - Had the respondent afforded an opportunity of personal hearing to the petitioner, they would have been in a position to explain the factual situation and would have placed legal submissions, which they had raised in their objections - This is the reason why the Hon ble Division Bench pointed out that even though the Act does not specifically provide for an opportunity of personal hearing, there is no bar for Assessing Officers to call upon the assessees to appear before them, produce documents and explain their case. The matter is remitted back to the respondent for a fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order under TNVAT Act, 2006 and Central Goods and Service Tax Act, 2017; Adequate opportunity to produce documents for input tax credit; Non-consideration of relevant legal decisions by Assessing Officer; Affording opportunity of personal hearing to explain factual situation and legal submissions; Appeal against impugned order.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, 2006 and Central Goods and Service Tax Act, 2017, challenged the assessment order for the year 2009-10 due to a legal error. Previously, the petitioner filed a writ petition contesting a similar issue, where the court observed that the petitioner crossed the turnover threshold and needed to file Form I returns, but the opportunity to produce purchase bills was not provided. The petitioner complied with conditions in the previous petition, submitted objections to the notice, and the respondent passed the impugned order. The petitioner claimed to have filed Form I returns, input tax credit, and cited legal precedents like C.K.G. Agencies' case. However, the Assessing Officer did not consider the cited decisions, despite being aware of them, and completed the assessment without a personal hearing.

In a related case, the court held that denying input tax credit beyond 90 days was incorrect, citing the C.K.G. Agencies case. The court emphasized that the Commissioner's clarification on input tax credit eligibility must be followed. The failure to provide an opportunity of personal hearing led to the erroneous assessment. The court set aside the impugned order, directing a fresh assessment considering legal decisions and allowing a personal hearing. The Government Advocate's argument for filing an appeal was rejected, as the legal issue was already settled by the court, relieving the petitioner from appealing.

In conclusion, the writ petition was allowed, the impugned order was set aside, and the matter was remitted for a fresh assessment in line with legal decisions and after affording a personal hearing. The respondent was instructed to redo the assessment on merits and provide appropriate relief to the petitioner. No costs were awarded, and the connected WMP was closed.