2019 (3) TMI 933 - HC - VAT and Sales Tax

Revision of assessment - Deemed assessment - Section 22(2) of the TNVAT Act, 2006 - non-speaking order - principles of natural justice - Held that - Even though, the respondent in the impugned order has acknowledged receipt of the objections raised by the petitioner, has passed a non-speaking order, without considering all the objections raised by the petitioner, in the reply dated 30.11.2015. As seen from the impugned orders, personal hearing was also not afforded by the respondent to the petitioner, even though a specific request was made. A Division Bench of this Court in the case of G.V.Cotton Mills (P) Ltd., vs., the Assistant Commissioner (CT) 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. 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 matters are 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 and pass final orders under Section 27 of the TNVAT Act, 2006 on merits - Petition allowed by way of remand.

Summary

Issues involved:
Challenge to impugned Assessment orders under Section 27(1)(a) of the TNVAT Act, 2006.

Detailed Analysis:

1. Petitioner's Contentions:
The petitioner's returns for multiple assessment years were accepted initially, but later, based on a spot audit, the respondent sought to revise the assessments under Section 27 of the TNVAT Act, 2006. The petitioner objected to the revision, stating it was unjustified and unlawful, and requested a personal hearing, which was denied. The respondent issued assessment orders revising the assessments, leading to the filing of writ petitions challenging these orders.

2. Court Hearing:
During the court hearing, the petitioner's counsel highlighted that objections raised against the revision were not considered by the respondent, who passed a cryptic order rejecting the objections without granting a personal hearing. The respondent argued that the petitioner could appeal under Section 51 of the Act, making interference under Article 226 of the Constitution inappropriate.

3. Judicial Analysis:
The court noted the petitioner's compliance with compounding assessment requirements and the objections raised against the revision. The court found that the respondent failed to consider various expenses while revising the assessment, and the denial of a personal hearing violated principles of natural justice. Referring to a previous judgment, the court emphasized the mandatory nature of affording a personal hearing to the assessee.

4. Court Decision:
The court quashed the impugned assessment orders and remanded the matters back to the respondent for fresh consideration. The respondent was directed to provide sufficient opportunity to the petitioner, including a personal hearing, and pass final orders within a specified timeframe. The writ petitions were disposed of with no costs awarded.

In conclusion, the court's decision emphasized the importance of procedural fairness, particularly the right to a personal hearing, in assessment proceedings under the TNVAT Act, 2006. The judgment serves as a reminder of the significance of upholding principles of natural justice in administrative actions impacting individuals' rights.