2019 (3) TMI 1213 - HC - VAT and Sales Tax

Validity of assessment order - deemed assessment - TNVAT Act - the respondent initiated revision of assessment proceedings under Section 27(1) of the Act for the years 2013-14 to 2015-16 and under Section 22(4) of the Act, for the year 2016-17, by issuing a prerevision notice - principles of natural justice - Held that - The assessment of the total taxable turnover of the petitioner was done by the respondent only for a period of nine months under Section 22(2) of the TNVAT Act, 2006. The assessment will have to be done for the whole year. Even though the petitioner had furnished all the details and supporting documents in support of their objections in the impugned assessment orders, the same has not been duly considered by the respondent objectively. Instead they have verbatim reproduced the sales figures contained in the inspection report dated 25.01.2017 of the Enforcement Wing Officers of the respondent - Admittedly, in the instant case, it has been seen from the impugned assessment orders that no personal hearing was afforded to the petitioner. Even though, it is mentioned that the request was made by the petitioner for personal hearing under the impugned assessment orders, while granting personal hearing, the respondent ought to have fixed a date for personal hearing to enable the petitioner to present themselves before the respondent and submit their objections. In the instant case, no such specific date was fixed for personal hearing by the respondent. In the instant case, as seen from the impugned assessment orders, the objections raised by the petitioner has not been considered by the respondent objectively. Instead, he has accepted the inspection report of the Enforcement Wing Officials in entirety, without applying his mind independently. Further, in the instant case, no personal hearing was afforded to the petitioner before passing the impugned assessment orders. Therefore, this Court is of the considered view that the respondent has violated the principles of natural justice. The matter is remanded back to the respondent for fresh consideration and the respondent shall pass final orders, after giving sufficient opportunity to the petitioner to raise all objections available to him under law - Petition allowed by way of remand.

Summary

Issues involved: Challenge to assessment orders under Tamil Nadu Value Added Tax Act, 2006 based on lack of jurisdiction, violation of natural justice, and failure to consider objections and provide personal hearing.

Analysis:

1. Challenge to Assessment Orders: The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged assessment orders for the years 2013-14 to 2016-17. The respondent initiated revision of assessment proceedings based on an Enforcement Wing Officer's report without conducting a proper verification. The petitioner contended that the respondent lacked jurisdiction for revision of assessment and failed to provide a personal hearing before passing the final orders.

2. Deemed Assessment and Procedure: The assessment of the petitioner's total taxable turnover was done only for a period of nine months under Section 22(2) of the TNVAT Act, 2006. The petitioner argued that the assessment should have been done for the whole year, as per the provisions of the Act. The respondent accepted the inspection report without subjective satisfaction about its correctness, disregarding the petitioner's objections.

3. Violation of Natural Justice: The petitioner highlighted the lack of a personal hearing in the assessment process. Despite the petitioner furnishing details and supporting documents, the respondent verbatim reproduced the sales figures from the inspection report without duly considering the objections raised. The petitioner cited legal precedents emphasizing the importance of affording a personal hearing and independent assessment by the Assessing Officer.

4. Judicial Precedents: The petitioner relied on various judgments to support their contentions, including cases where the assessing officer's independent analysis and consideration of dealer's objections were deemed necessary. The court referred to previous rulings emphasizing that the enforcement officer's report should not be conclusive proof of wrongdoing and that the assessing officer must objectively analyze the dealer's explanation and evidence.

5. Remedy and Decision: The High Court quashed the impugned assessment orders and remanded the matter back to the respondent for fresh consideration. The court directed the respondent to provide the petitioner with a sufficient opportunity to raise objections, grant a personal hearing, and pass final orders within a specified timeframe. The court held that the respondent's actions violated the principles of natural justice and ordered the matter to be resolved in accordance with the law.

In conclusion, the High Court's judgment addressed the issues of lack of jurisdiction, violation of natural justice, and failure to consider objections in the assessment process under the TNVAT Act, 2006. The court emphasized the importance of affording a personal hearing, independent assessment by the assessing officer, and objective consideration of dealer's objections. The judgment provided a clear remedy by quashing the assessment orders and remanding the matter for fresh consideration, ensuring compliance with legal principles and procedural requirements.