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2018 (7) TMI 1664 - HC - VAT and Sales Tax


Issues Involved:
Challenging assessment order under Tamilnadu VAT Act for non-appearance of dealer despite summons; Violation of principles of natural justice due to lack of personal hearing; Availability of alternative remedy of appeal; Interpretation of reasonable opportunity to show cause including personal hearing.

Analysis:
The petitioner filed a writ petition challenging an assessment order passed by the respondent under the Tamilnadu VAT Act for the year 2006-2007, citing non-appearance due to ill-health. The petitioner argued that the order was passed without providing an opportunity for personal hearing, violating principles of natural justice. The respondent contended that summons were issued, but the petitioner failed to appear, and an appeal was available as an alternative remedy. The High Court noted that the assessment was made under Section 22(2) of the Act after the petitioner failed to respond to summons. However, it was observed that the respondent did not communicate the date for personal hearing, as required by established instructions and case law.

The Division Bench of the Court referred to relevant provisions and circulars emphasizing the importance of affording a fair opportunity, including personal hearing, to the dealer before passing assessment orders. The Court discussed various judicial precedents highlighting the significance of oral hearings in cases involving complex factual disputes. It was noted that fairness may require oral hearings in certain situations, as oral arguments can influence decision-making significantly. The Court cited decisions where personal hearings were deemed necessary for fair play and justice, especially in cases involving factual complexities.

In light of the above analysis, the Court found that the respondent's failure to provide a personal hearing to the petitioner amounted to a violation of natural justice. The impugned assessment order was set aside, and the matter was remanded back to the respondent. The petitioner was directed to file objections within 15 days, and the respondent was instructed to pass final orders after providing a personal hearing within four months. The writ petition was allowed with no costs, and the connected miscellaneous petition was closed.

 

 

 

 

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