2018 (3) TMI 1533 - HC - VAT and Sales Tax

Principles of Natural Justice - Revision of assessment - purchase of H.O.T Crane - suppression of facts - it is pleaded, the respondent being a quasi judicial authority ought to have given reasonable time before proceeding on the basis of the inspection report based on which the original notice was issued - Held that - while the respondent had issued the pre-assessment notices on the basis of the inspection report of the enforcement wing, no prejudice would have been caused had the respondents offered an opportunity of personal hearing to the petitioner to come and explains their case before passing final orders under Section 27 of the Act. The problem had occurred in the present case only for a simple reason that the respondent failed to hear the petitioner. Division Bench of this Court in Madras Granite (P) Limited Vs Commercial Tax Officer, Arisipalayam Circle, Salem and Another reported in 146 (1) STC 642 2002 (10) TMI 767 - MADRAS HIGH COURT has held that It is well-settled that the assessing officer is a quasi-judicial authority and in exercising his quasi-judicial function of completing the assessment, he is not bound by the instructions or directions of the higher authorities. Finding that the respondents miserably failed to follow the mandatory provisions under Section 27(1) and 27(2)of the Act, the impugned assessment orders are unsustainable in law - impugned order set aside - petition allowed.

Summary

Issues:
Challenging impugned proceedings by Commercial Tax Officer for revision of assessment under Tamil Nadu Value Added Tax Act, 2006. Violation of Principles of Natural Justice due to lack of personal hearing before passing final orders under Section 27 of the Act.

Analysis:
The petitioner, a registered dealer in Automobiles, challenged the revision of assessment for the years 2010-2011 to 2014-2015 by the Commercial Tax Officer based on an inspection report. The petitioner maintained necessary records and submitted objections with purchase invoices to refute the allegations of turnover or tax escapement. Despite requests for one month to reconcile turnovers and grant a personal hearing, the impugned orders were passed without a hearing, violating Principles of Natural Justice.

The petitioner argued that the assessing officer is bound by quasi-judicial principles and should have provided a reasonable opportunity for a personal hearing before passing final orders. Citing previous judgments emphasizing the importance of reasoned speaking orders and adherence to procedural requirements, the petitioner contended that the impugned orders lacked justification for revising the assessment and failed to follow mandatory provisions under the Act.

The Additional Government Pleader defended the orders but acknowledged the petitioner's requests for time and reconciliation. However, the failure to offer a personal hearing and the lack of notice for deciding the matter deprived the petitioner of a fair opportunity to present their case. Referring to precedents where assessments were quashed due to procedural lapses, the Court held that the impugned orders were unsustainable in law and directed the respondent to redo the assessment proceedings after complying with the necessary procedures, including issuing a notice for a personal hearing and passing a reasoned speaking order.