2019 (3) TMI 772 - HC - VAT and Sales Tax

Principles of natural justice - validity of Assessment order - TNVAT Act - It is the case of the petitioner that the details of the alleged sale to M/s. Jay Jay Agency, namely, the invoices, payment details and other documents sought for by the petitioner, were not provided by the respondent despite the request made by them - Held that - The respondent ought to have considered all the above mentioned factors and should have given sufficient opportunity to the petitioner to place all his objections and also should have given an opportunity to the petitioner to cross examine the alleged purchasers M/s.Jay Jay Agency, Pollachi - But, in the instant case, no such opportunity was given to the petitioner and therefore, the respondent has violated the principles of natural justice - the matter is remanded back to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment order based on violation of principles of natural justice.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged an assessment order for the year 2013-2014, alleging violation of natural justice principles. The petitioner, a small-time pillow manufacturer, contended that the respondent proposed a revision of assessment without verifying books and records, solely based on an enforcement officer's representation. The petitioner denied selling goods to a specific agency and requested evidence which the respondent failed to provide, including invoices and payment details. The petitioner was not given the opportunity to cross-examine the agency's representatives, as required by Section 81 of the TNVAT Act.

The respondent, however, alleged suppression of sales by the petitioner, determining a much higher taxable turnover for the assessment year. The respondent claimed that despite issuing notices and providing opportunities, the petitioner did not respond adequately. The assessment order was passed without allowing the petitioner to cross-examine the alleged purchasers or providing requested documents.

The court found that the respondent's actions violated natural justice principles. The court emphasized that the petitioner should have been given the opportunity to raise objections and cross-examine the alleged purchasers. The court noted discrepancies in the assessed turnover compared to previous years and the petitioner's business nature. Consequently, the court quashed the assessment order and remanded the matter to the respondent for fresh consideration. The respondent was directed to afford the petitioner sufficient opportunity, including cross-examination of the agency's representatives, and to pass final orders within eight weeks.

In conclusion, the court disposed of the writ petition with no costs, instructing the respondent to reevaluate the matter with adherence to natural justice principles and legal procedures.