2018 (2) TMI 991 - HC - VAT and Sales Tax

Principles of Natural Justice - TNVAT Act - CST Act - reversal of input tax credit - impugned orders have been challenged on the ground that the petitioner was not afforded adequate opportunity to submit their objections and that no opportunity of personal hearing was granted - Held that - Considering the fact situation, which has led to the impugned assessment orders and also the fact such a consequence is on account of the petitioner not being diligent, this Court is inclined to grant one more opportunity to the petitioner, however, subject to a condition - the writ petitions are disposed of with a direction to the petitioner to pay 15% of the disputed tax for each of the assessment years within a period of three weeks from the date of receipt of a copy of this order - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders under Tamil Nadu Value Added Tax Act, 2006 and Central Sales Tax Act, 1956 for the years 2015-16 and 2016-17 due to lack of opportunity for objections and personal hearing.

Analysis:
The petitioner, a registered dealer, challenged the assessment orders for the mentioned years citing inadequate opportunity for objections and personal hearing. They claimed no manufacturing loss in their process and argued that a personal hearing could have clarified this. The affidavits revealed attempts by the petitioner's representatives to seek more time for responses, but the assessment orders were passed without granting a personal hearing, leading to subsequent recovery notices.

The court noted discrepancies found during an inspection at the petitioner's business premises, including unreported input tax credit reversal and failure to file necessary forms. Referring to a previous case, the court emphasized the importance of a scientific approach in determining manufacturing loss. It directed the Assessing Officers to inspect the factory to understand the process before calculating any loss. Acknowledging the petitioner's lack of diligence, the court granted them another opportunity, subject to a condition.

The judgment directed the petitioner to pay 15% of the disputed tax for each assessment year within three weeks. Compliance would allow the petitioner to submit objections, receive a personal hearing, and have the assessment redone. Failure to meet this condition would void the benefits of the order. The judgment concluded by closing the writ petitions without costs.