2019 (3) TMI 844 - HC - VAT and Sales Tax

Validity of assessment order - no proper opportunity of hearing provided - principles of natural justice - Held that - Even though the petitioner has written the letter dated October 10,2007 to the respondent seeking one month time for furnishing the reconcile statement of accounts,the petitioner neither made any further representation nor produced the records to the respondent,instead the petitioner waited to hear from the respondent,till the respondent passed the impugned orders. Therefore,it is evident that the petitioner has also to be blamed as they did not furnish the reconcile statement to the respondent on their own. While setting aside the orders impugned in these writ petitions on the ground of violation of principles of nature of justice,this court is inclined to award cost of ₹ 5,000 payable by the petitioner in each writ petition,totally a sum of ₹ 15,000 payable to the Tamil Nadu State Legal Aid Service Authority,High Court Buildings,Chennai,within the period of three weeks from the date of receipt of a copy of this order,failing which the authorities are directed to proceed further - petition disposed off.

Summary

Issues:
Challenging final assessment orders for assessment years 2005-06, 2004-05, 2003-04 under TNGST - Violation of principles of natural justice - Opportunity for production of accounts - Alternative remedy of appeal - Maintainability of writ petitions.

Analysis:
1. The petitioner, a registered dealer in electrical goods, challenged final assessment orders for the years 2005-06, 2004-05, 2003-04 under TNGST, alleging violation of principles laid down by the court in previous judgments. The petitioner maintained proper records and paid taxes but faced a revision of taxable turnover by the respondent without adequate verification of D7 records, leading to the issuance of impugned orders after a delay from the petitioner's request for time to reconcile accounts.

2. The petitioner contended that the impugned orders lacked legal sustainability and violated principles of natural justice by not granting sufficient time for the production of accounts. The petitioner sought to quash the orders based on the court's previous rulings and emphasized the necessity for a fair opportunity to present their case, especially considering the fiscal impact of the orders.

3. The Special Government Pleader argued that the petitioner had sufficient opportunities to respond and failed to avail them, leading to the enforcement officials relying on D3 proposals and passing judgments based on entries in D7 records. The respondent issued notices and pre-assessment notices based on proposals and allowed time for the submission of accounts, which the dealers did not provide despite a seven-month period.

4. The respondent contended that the petitioner had an alternative remedy of appeal before the Deputy Commissioner (CT), Salem, which was not pursued, making the writ petitions potentially non-maintainable. The petitioner, however, argued that the violation of natural justice principles justified the filing of writ petitions despite the existence of an alternative appeal process.

5. The court, considering the circumstances, found merit in the petitioner's argument regarding the violation of natural justice principles and set aside the impugned orders. However, the court also noted the petitioner's delay in furnishing the reconcile statement of accounts and imposed a cost of ?5,000 on each writ petition, totaling ?15,000 payable to the Tamil Nadu State Legal Aid Service Authority within three weeks.

6. Ultimately, the court directed the respondent to provide sufficient opportunity to the petitioner and pass orders on merits within four months from the date of the court's order, disposing of the writ petitions with the mentioned directions and without costs.