2019 (3) TMI 932 - HC - VAT and Sales Tax

Revision of earlier assessment - Section 27 of the Tamil Nadu Value Added Tax Act, 2006 - revision of assessment mainly based on the inspection report - opportunity of personal hearing not provided - principles of natural justice - Held that - As seen from the impugned order, personal hearing was not afforded by the respondent to the petitioner, even though a specific request was made. A Division Bench of this Court in G.V.Cotton Mills (P) Ltd. Vs. The Assistant Commissioner (CT), Coimbatore 2018 (3) TMI 1617 - MADRAS HIGH COURT has held that the right of personal hearing to the assessee is mandatory even if the assessee fails to submit objections to the pre-assessment notice. Thus, the revision of assessment made by the respondent under Section 27 of the TNVAT Act, 2006 without affording an opportunity of personal hearing to the petitioner is bad in law and violates the principles of natural justice - the matter is remanded back to the respondent for fresh consideration and the respondent is directed to afford sufficient opportunity to the petitioner including the right of personal hearing - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order under Section 27 of the TNVAT Act, 2006 for the assessment year 2011-2012 based on a spot audit by Enforcement Wing Officers. Denial of personal hearing and objections not considered in the impugned order.

Analysis:

Challenge to Assessment Order:
The petitioner challenged the assessment order issued under Section 27 of the TNVAT Act, 2006 for the assessment year 2011-2012. The petitioner claimed that the returns submitted were accepted, and the assessment was deemed completed under Section 22(2) of the Act. However, based on a spot audit, the respondent sought to revise the assessment, leading to the petitioner filing the instant Writ Petition.

Contentions of Petitioner:
The petitioner argued that the revision of assessment was unjustified and unlawful. Despite submitting detailed objections and requesting a personal hearing, the respondent passed the impugned assessment order without considering the objections raised. The petitioner highlighted that he had opted for compounding assessment, filed monthly returns, and paid taxes, which were accepted by the respondent.

Contentions of Respondent:
The Additional Government Pleader for the respondent contended that the petitioner had an alternative appellate remedy under Section 51 of the Act and thus, the Court should not interfere under Article 226 of the Constitution of India.

Judicial Pronouncements:
The petitioner referred to various judicial pronouncements supporting his defense and specifically requested a personal hearing in the revision proceedings. The Court noted that denial of personal hearing to the assessee is a violation of natural justice, as established in a previous Division Bench order.

Court's Decision:
The Court observed that the respondent failed to consider all objections raised by the petitioner and issued a non-speaking order. Citing the mandatory nature of the right to a personal hearing, the Court held that the revision without affording this opportunity was unlawful. Consequently, the impugned order was quashed, and the matter was remanded back to the respondent for fresh consideration with directions to provide sufficient opportunity, including a personal hearing, within a specified timeframe.

Conclusion:
The Court disposed of the Writ Petition, emphasizing the importance of adhering to principles of natural justice in assessment proceedings. The respondent was directed to reevaluate the assessment in compliance with the law, ensuring the petitioner's right to a personal hearing and a fair consideration of objections.