2018 (10) TMI 204 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - the respondent, without providing an opportunity of personal hearing and without independent application of mind, has passed the impugned order - principles of Natural Justice - Held that - Admittedly, a notice was issued by the respondent on 25.09.2017, for which objections were filed by the petitioner on 17.10.2017. The respondent, thereafter, ought to have fixed a date for personal hearing and communicated the same to the petitioner. A reading of the impugned orders reveal that no such exercise was done by the respondent. The Commissioner of Commercial Taxes, pursuant to the recommendations of the Hon ble Justice Sri Ramanujam Committee, has laid down certain procedures to be followed by the assessing authority before passing final orders. That circular is binding on the respondent. It mandates that personal hearing shall be given even such an opportunity is asked or not. But, in contravention of the circular, without providing an opportunity of personal hearing after filing of the objections, the respondent has passed the impugned orders. A Division Bench of this Court in an unreported decision in G.V.Cotton Mills (P) Ltd., Rep. by its Managing Director Vs. The Assistant Commissioner (CT), Avarayampalayam Assessment Circle Corporation of Shopping Complex, Coimbatore, 2018 (3) TMI 1617 - MADRAS HIGH COURT , has held that the opportunity of personal hearing cannot be denied, even if the objections not filed. In this case, admittedly, the petitioner has submitted his objections. But, the respondent, after receipt of the said objections, has passed the impugned orders, without giving an opportunity of personal hearing. Therefore, on this ground alone, the impugned orders are liable to be set aside. The matter is remanded back to the file of the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Challenging revised assessment orders for assessment years 2013-14, 2014-15, and 2015-16 on grounds of lack of personal hearing and independent application of mind by the assessing authority.

Detailed Analysis:

1. Lack of Personal Hearing:
The petitioner, a dealer in granite under the Tamil Nadu Value Added Tax Act, challenged revised assessment orders for three assessment years. The respondent issued notices and received objections from the petitioner but failed to provide a personal hearing before passing the impugned orders. The Court noted that the circular by the Commissioner of Commercial Taxes mandated a personal hearing, even if not requested, following the recommendations of the Justice Sri Ramanujam Committee. Citing a previous decision, the Court emphasized that the opportunity of personal hearing cannot be denied, even if objections were not filed. As the respondent did not provide a personal hearing despite objections being submitted, the impugned orders were set aside on this ground.

2. Independent Application of Mind:
The Court observed that the assessing authority confirmed the proposal without an independent application of mind on the petitioner's objections. Referring to a prior judgment, it was highlighted that the assessing officer must consider information independently, call for explanations, and provide reasons for decision-making. In this case, the respondent did not demonstrate an independent assessment or provide reasons for rejecting objections, leading to the impugned orders being deemed unsustainable. Consequently, the impugned orders were set aside on this basis as well.

3. Decision and Remand:
In light of the above findings, the Court set aside the impugned orders and remanded the matter to the respondent for fresh consideration. The respondent was directed to conduct a personal hearing, pass reasoned orders on merits, and ensure compliance with the law within six weeks. The Court clarified that if the petitioner did not cooperate, the respondent could proceed with the available records. The writ petitions were disposed of without costs, and the connected miscellaneous petitions were closed accordingly.

This detailed analysis of the judgment highlights the issues of lack of personal hearing and independent application of mind, the legal principles applied, and the final decision and directions given by the Court for remand and fresh consideration by the assessing authority.