2018 (9) TMI 1047 - HC - VAT and Sales Tax

Principles of natural justice - Personal hearing not granted - Held that - In the instant case, even though personal hearing is sought for, that was not granted to the petitioner. A reading of the impugned order also clearly shows that the assessing authority has not at all considered the request of the petitioner or the instructions issued by the Commissioner of Commercial Taxes, before passing final orders - the order impugned is violative of principles of natural justice. The matter is remanded back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in passing the impugned order

Detailed Analysis:

Issue 1: Violation of principles of natural justice
The petitioner, a registered dealer under the TNVAT Act and CST Act, filed returns for the assessment year 2010-11, which were deemed assessed under Section 22(2) of the TNVAT Act. Subsequently, based on a surprise inspection by the Enforcement Wing officials, a revision notice was issued by the respondent. The petitioner objected to the proposals made but was not granted a personal hearing or the opportunity to cross-examine sellers as per Sections 81 and 82 of the TNVAT Act. The impugned order did not adequately address the objections raised, leading to a lack of consideration of the petitioner's submissions and case laws. The Head of the Department's instructions emphasized the mandatory requirement of a personal hearing before passing assessment orders. The failure to provide a personal hearing and consider the petitioner's requests rendered the impugned order in violation of principles of natural justice.

Issue 2: Legal Precedent
Referring to a Division Bench judgment, it was highlighted that denial of personal hearing solely based on the absence of objections to pre-assessment notices is not justified. The judgment emphasized that even if objections were not submitted, the assessing authority should provide an opportunity for a hearing. The failure to submit objections does not warrant the denial of a personal hearing, as observed by the Hon'ble Supreme Court in a relevant case. In the present case, despite the petitioner's request for a personal hearing, it was not granted, and the assessing authority did not consider the instructions issued by the Commissioner of Commercial Taxes, further solidifying the violation of principles of natural justice.

Issue 3: Court's Decision
Considering the violation of principles of natural justice, the Court set aside the impugned order and remanded the matter back to the respondent for fresh consideration. The respondent was directed to provide all web-obtained details relied upon for the assessment order, and the petitioner was instructed to submit complete objections within fifteen days. The respondent was mandated to afford a personal hearing to the petitioner and decide the matter on merits within four weeks, free from the influence of the Enforcement Wing's report. The writ petition was allowed, no costs were imposed, and the connected writ miscellaneous petition was closed as a consequence.