2019 (3) TMI 1214 - HC - VAT and Sales Tax

Principles of natural justice - compounding assessment under Section 3(4) of the TNVAT Act, 2006 - the respondent has passed the impugned assessment order without furnishing those documents - Held that - Admittedly, in the instant case, the petitioner by his reply, dated 18.01.2017 to the pre-revision notice, dated 27.09.2016 had categorically denied the alleged interest purchaser from Sri Said Industries, Anandapur and they have also requested for copies of the documents pertaining to the alleged purchase from the second respondent. Eventhough, these objections were received by the second respondent, even without furnishing a copy of the documents pertaining to the alleged purchase from Sri Sai Industries, Anandhapur or any other documentary proof to prove the said purchase. The second respondent has passed the impugned assessment order, without applying his mind to the reply, dated 18.01.2017 objectively. It has been consistently held by this Court that sufficient opportunity must be granted to the assessee before any assessment order is passed - But, in the instant case, even though, the specific request was made for production of proof for the said alleged purchase made by the petitioner from Sri Sai Industries, Anandhapur. The said proof has neither being given to the petitioner nor the second respondent has sent any reply to the objection, dated 18.01.2017 sent by the petitioner before passing of the impugned assessment order. This Court is of the considered view is that, principles of natural justice has been violated by the second respondent under the impugned assessment order - the matter is remanded back to the second respondent for fresh consideration in accordance with law - petition allowed by way of remand.

Summary

Issues: Challenge to assessment order under TNVAT Act, 2006 based on violation of natural justice principles.

Analysis:
1. The petitioner, a registered dealer under the TNVAT Act, 2006, challenged an assessment order for the year 2015-2016, alleging that the respondent passed the order without considering their reply requesting certain documents related to alleged purchases. The petitioner opted for compounding assessment under Section 3(4) of the Act and disputed interstate purchases from a specific entity.

2. The petitioner contended that despite denying the alleged purchases and requesting relevant documents, the respondent failed to furnish the requested documents and proceeded to pass the impugned assessment order. The petitioner also mentioned their failure to pay monthly returns and fees, leading to the filing of the Writ Petition against the assessment order.

3. During the hearing, the petitioner's counsel highlighted the petitioner's denial of the alleged purchases and the request for supporting documents in their reply to the assessment notice. The petitioner argued that the respondent's failure to provide the requested documents violated the principles of natural justice.

4. In response, the Additional Government Pleader for the respondents defended the assessment order, stating that the petitioner had the burden of proof to establish the absence of interstate purchases. The government's position was that the petitioner had the option to appeal under Section 51 of the TNVAT Act, 2006, instead of challenging the assessment directly.

5. The Court noted that the petitioner had explicitly denied the alleged purchases and requested documentary evidence in their reply to the assessment notice. Despite this, the respondent passed the assessment order without furnishing the requested documents, indicating a lack of objective consideration.

6. The Court held that the respondent's actions amounted to a violation of natural justice principles. Consequently, the impugned assessment order was quashed, and the matter was remanded back to the respondent for fresh consideration within a specified timeframe, emphasizing the importance of granting sufficient opportunities to the assessee before passing any assessment order.

7. The Writ Petition was disposed of with the direction to re-examine the matter in accordance with the law, emphasizing the importance of upholding natural justice principles in assessment proceedings under the TNVAT Act, 2006.