2018 (10) TMI 813 - HC - VAT and Sales Tax

Validity of assessment order - assessment years 2011-2012 to 2014-2015 - it is alleged that Assessing Officer erred in merely accepting the report filed by the Enforcement Officials, without independently applying his mind to the objections raised by the petitioner in pursuant to the notices of proposal - opportunity of hearing not provided while imposing penalty - principles of Natural Justice. Held that - There is no dispute to the fact that the petitioner has filed the reply to such notices of proposal. The reply was rejected by the respondent, as an after thought, only by stating that the dealers have admitted every issue before the Inspecting Authorities at the time of inspection. The Assessing Officer has only taken into consideration of the Inspection Report filed by the Inspecting Authorities and not applied his independent mind to the reply submitted by the petitioner to each issues - the Assessing Officer cannot solely depend upon the Inspection Report and conclude the assessment by brushing aside the objections raised by the petitioner as an after thought, without applying his independent mind to those objections and give any finding on the same. The Assessing Officer has not afforded an opportunity of personal hearing to the petitioner, especially, when he has chosen to impose penalty under Section 27(3) of the TNVAT Act, 2006 - Circular No.7/2014 dated 03.02.2014, referred wherein, it is contemplated that granting of personal hearing is mandatory and the same shall invariably be afforded to the dealer irrespective of whether the dealer has opted for such personal hearing or not. This Court is inclined to interfere with the impugned orders of assessment and remit the matter back to the Assessing Officer to re-do the assessment once again on merits - appeal allowed by way of remand.

Summary

Issues:
Challenging assessment orders for assessment years 2011-2012 to 2014-2015; Violation of natural justice principles; Dependence on Enforcement Officials' report without independent assessment; Limitation period in initiating proceedings under Section 27 of Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner challenged assessment orders for various assessment years, alleging violation of natural justice principles. The petitioner contended that the Assessing Officer failed to provide a personal hearing opportunity and merely accepted the Enforcement Officials' report without independent assessment. Additionally, for the assessment year 2011-2012, the petitioner argued that the initiation of proceedings under Section 27 was time-barred. The respondent argued that objections were considered before passing the orders, but admitted no personal hearing was granted. Regarding the limitation issue, the respondent claimed the notices were within time due to an amendment in 2012.

The High Court noted that the Assessing Officer did not give a personal hearing to the petitioner before imposing penalties under Section 27(3) of the TNVAT Act, 2006. The court emphasized the mandatory nature of personal hearings as per Circular No.7/2014, stating they should be granted irrespective of the dealer's preference. The court found fault with the Assessing Officer's reliance solely on the Inspection Report and failure to independently consider the petitioner's objections. Consequently, the court set aside the assessment orders and remitted the matter for reassessment, directing the Assessing Officer to provide a personal hearing, consider objections independently, and ensure a lawful assessment process.

The court refrained from expressing a view on the jurisdictional issue raised for the assessment year 2011-2012, as the matter was remitted for reassessment. The court allowed the writ petitions, setting aside the assessment orders and outlining conditions for the reassessment process. The petitioner was directed to submit any additional replies within two weeks, after which the Assessing Officer would schedule a personal hearing and issue fresh assessment orders within four weeks of the hearing. The court concluded by stating no costs were awarded, and connected miscellaneous petitions were closed.