2019 (2) TMI 1475 - HC - VAT and Sales Tax

Validity of assessment order - reopening of assessment - levy of VAT - errors in the Form WW - section 84 of the Tamil Nadu Value Added Tax Act, 2006 - Held that - The petitioner in this case has all along been appearing before the authorities and appears to be co-operating in the completion of the assessment. No doubt some adjournments have been sought but the reasons adduced for the seeking of the same do not give me the impression that the petitioner was purposely delaying the proceedings. The issue in respect of which details have been sought, being the reconciliation of sales and purchase figures, is a technical one, and one calling for the assistance of a professional. The reason for the non-availability of the Chartered Accountant is also a legitimate one, as seen from the letter of the petitioner dated 20.11.2018 stating that the CA had rushed to Vedaranyam to attend to the devastation caused in the wake of the Gaja cyclone. The petitioner has approached the Assessing Authority with a petition for rectification under section 84 though styled as a petition for reopening of assessment and enclosing details in support of its stand that the sales and purchases were, in fact, reconciled. The rejection of this petition by the respondent quoting the provisions of Section 51(1) relating to appeal is hyper technical and not proper. The prayer specifically requests rectification and there appears no doubt in my mind that the petition is one filed in terms of the provisions of Section 84 of the Act. The Assessing Officer is directed to take up for hearing petition dated 31.01.2019 under Section 84 of the Act, afford due opportunity to the assessee and dispose the same in accordance with law - petition dismissed.

Summary

Issues:
Challenge to assessment order for the period 2014-15 under Tamil Nadu Value Added Tax Act, 2006; Rejection of petition for re-opening of assessment under Section 84 of the Act.

Analysis:
In the case at hand, the petitioner, a Private Limited Company engaged in trading computer hardware, challenged an assessment order dated 08.01.2019 for the period 2014-15. The petitioner had filed regular monthly returns and undergone auditing as per section 63-A of the Act. Errors were identified in the audit report, leading to a notice from the respondent. Despite seeking a rescheduling of a personal hearing, the assessing officer proceeded with a proposal for assessment, alleging discrepancies in stock verification and Input Tax Credit. The petitioner's subsequent request for rectification was rejected, citing that re-opening powers rest with the Appellate Deputy Commissioner under Section 51(1) of the Act.

The High Court considered the petitioner's cooperation in the assessment process and the technical nature of the reconciliation issue. It noted the legitimate reasons for seeking adjournments, such as the Chartered Accountant's unavailability due to attending to cyclone-related matters. The Court criticized the assessing officer's haste in passing the impugned order without waiting for the petitioner's alternate arrangements. The rejection of the rectification petition under Section 84, despite being a plea for correction, was deemed hyper-technical. The Court directed the Assessing Officer to hear the petition dated 31.01.2019 under Section 84, emphasizing the right of the assessee to seek rectification of errors in assessment.

Furthermore, the Court clarified that the assessing officer must provide a personal hearing opportunity before deciding on rectification applications, especially in cases involving factual and arithmetic intricacies. Consequently, the Assessing Officer was instructed to afford a personal hearing to the petitioner before disposing of the rectification petition. The petitioner was directed to appear before the Assessing Officer on a specified date for this purpose, with a mandate for the officer to adjudicate and conclude the matter within four weeks from the personal hearing. The judgment upheld the assessment order dated 08.01.2019, dismissing the challenge in W.P.No.4493 of 2019, while setting aside the order dated 05.02.2019 and allowing the petition in W.P.No.4498 of 2019. Connected Miscellaneous Petitions were dismissed, and no costs were awarded.