2018 (12) TMI 1282 - HC - VAT and Sales Tax

Maintainability of rectification petition - Section 84 of TNVAT Act - grievance of the petitioner against the said orders of assessment is that the same was passed without affording an opportunity of personal hearing to the petitioner - principles of natural justice - Held that - This Court has repeatedly held that providing such an opportunity of personal hearing is mandatory, especially, when the Assessing Officer chooses to impose penalty - the very revision of assessment orders passed in this case on 31.05.2018 without affording an opportunity of personal hearing to the petitioner, cannot be sustained on the ground of violation of principles of natural justice - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to orders dismissing rectification petitions under Section 84 of TNVAT Act for assessment years 2014-2015 and 2015-2016 based on lack of personal hearing opportunity violating principles of natural justice.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The petitioner challenged orders dismissing rectification petitions under Section 84 of the TNVAT Act for assessment years 2014-2015 and 2015-2016, alleging a lack of personal hearing opportunity. The Assessing Officer confirmed proposals without affording a personal hearing, leading to the imposition of tax and penalty. The petitioner contended that the absence of a personal hearing violated principles of natural justice, as they were not given a chance to present further documents to substantiate their position. The Assessing Officer rejected the rectification petitions mainly due to the petitioner's failure to produce certain documents during the revision of assessment proceedings.

2. Arguments and Counter-Arguments:
The petitioner argued that the absence of a personal hearing during the revision of assessment itself was a violation of natural justice, requiring correction by considering documents submitted during the rectification petitions. On the other hand, the Additional Government Pleader contended that a personal hearing was provided during the disposal of the rectification petitions, and the petitioner had no right to introduce new documents during this stage, as the scope of Section 84 of the TNVAT Act only covers errors apparent on the face of the record.

3. Court's Decision and Reasoning:
The Court noted that the orders revising the assessment were indeed passed without granting a personal hearing to the petitioner, which is mandatory, especially when penalties are imposed. Referring to a circular emphasizing the mandatory nature of personal hearings, the Court held that the revision orders without a personal hearing could not be sustained due to a violation of natural justice. Instead of directly challenging the assessment orders, the petitioner opted for rectification petitions under Section 84 of the TNVAT Act. The Court found that the Assessing Officer's failure to provide a personal hearing constituted an error apparent on the face of the record, making the rectification petitions maintainable.

4. Outcome and Directions:
The Court allowed the writ petitions, setting aside the impugned orders and remitting the matter back to the Assessing Officer. The Assessing Officer was directed to reconsider the rectification petitions on merits, considering the documents submitted by the petitioner in support of their contentions. The reassessment process was mandated to be completed within four weeks from the date of the Court's order, without imposing any costs on the parties involved.