2018 (11) TMI 1357 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - challenge to the said assessment order before the Writ Court was on the ground that the pre-assessment notice was not validly served on the appellant as per Rule 19 of the Tamil Nadu Value Added Tax Rules, 2007 - Held that - There is no error in the finding rendered by the Writ Court, since the duty of the Department is to serve notice on the dealer in terms of the said Rules, which has been done in the instant case. The assessment pertains to the year 2012-13 and that the revision of assessment was completed on 06.3.2015 - The assessment order remains a paper order, since the Department has been dragged into litigation. Apart from that, the specific plea of the appellant is that they are entitled for exemption in terms of Entry 80 under Part B of the Fourth Schedule to the TNVAT Act. Appeal allowed - the Writ Court is modified by directing the appellant to treat the assessment order dated 06.3.2015 as a show cause notice and submit their objections within a period of 15 days from the date of receipt of a copy of this judgment - appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment order under TNVAT Act for the year 2012-13 based on exemption claim for packaged drinking water cans. Validity of pre-assessment notice service and compliance with natural justice principles. Relief sought due to exceptional circumstances affecting appellant's ability to respond. Review of Writ Court's decision and granting opportunity for reassessment.

Analysis:
The writ appeal was filed to contest the assessment order passed under the Tamil Nadu Value Added Tax Act for the year 2012-13, specifically related to the appellant's claim for exemption concerning the sale of packaged drinking water in cans. The appellant argued that the pre-assessment notice was not validly served, citing Rule 19 of the TNVAT Rules, and raised concerns about the authorized recipient of the notice due to personal emergencies affecting the appellant's ability to respond promptly.

The Writ Court upheld the validity of the notice delivery, concluding that the principles of natural justice were not violated. However, considering the exceptional circumstances faced by the appellant, such as the closure of the business, medical treatment of the appellant's wife, and the son's accident, the High Court decided to grant relief to the appellant. The High Court noted the assessment pertained to a past year, and the Department's involvement in litigation rendered the assessment order a mere formality.

In light of the unique circumstances and the appellant's claim for exemption under specific provisions of the TNVAT Act, the High Court allowed the writ appeal. The Writ Court's decision was modified to treat the assessment order as a show cause notice, providing the appellant with an opportunity to submit objections within a specified timeframe. The Assessing Officer was directed to conduct a fresh assessment, considering the appellant's objections and ensuring compliance with the law.

In conclusion, the High Court granted the appellant the chance to present their case before the Assessing Officer, emphasizing the importance of procedural fairness and the need to address the appellant's claims in a manner consistent with legal requirements.