2019 (6) TMI 1270 - HC - VAT and Sales Tax

Validity of assessment order - principles of natural justice - service of order - change of address - HELD THAT - After the writ petitions were heard out for some time, as much as the writ petitions were taken up for disposal by consent, it was agreed by both counsel that an order can be passed by consent to the effect that the petitioner Assessee will be given an opportunity to submit all the records within a prescribed time frame subject to the petitioner paying 15% of the disputed tax (obviously excluding penalty) as per the amount set out in the respective impugned orders. In other words, disputed tax and 15% of the same is in accordance with the amount set out in the respective Assessment Orders. The impugned order of assessment in each of these writ petitions are set aside and the matter is remanded back to the sole respondent for assessment afresh.

Summary

Issues involved:
Three writ petitions challenging assessment proceedings under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) based on non-disclosure of turnover. The main issue is the alleged violation of principles of natural justice (NJP) in the assessment orders.

Analysis:

Issue 1: Assessment Proceedings and Non-disclosure of Turnover
The writ petitioner, engaged in civil contract works, was found to have not reported turnover to the Department despite being liable to file monthly returns under the TNVAT Act. The Assistant Commissioner initiated assessment proceedings due to non-disclosure of turnover by the petitioner. The impugned orders were passed after providing opportunities for objections, which the petitioner did not effectively utilize. The petitioner contended that the assessment orders violated NJP, specifically due to a change in address not communicated to the respondent.

Issue 2: Alleged Violation of Principles of Natural Justice
The petitioner argued that the impugned assessment orders disregarded NJP, claiming a change in address as a key ground for challenging the orders. However, the Court noted discrepancies between the address in the impugned orders and the petitioner's current address, which was not promptly communicated to the Department. Despite this, the petitioner visited the respondent's office, articulated objections, and provided the new address, leading the Court to conclude that there was substantial compliance with NJP in this case.

Issue 3: Resolution and Consent Order
After hearing both parties, a consent order was agreed upon. The impugned assessment orders were set aside, and the matter was remanded back to the respondent for fresh assessment. The petitioner was directed to deposit 15% of the disputed tax within a week, as a condition precedent for reassessment. Failure to make the deposit would result in the revival of the impugned orders. The respondent was instructed to receive all objections and documents within a specified timeframe for the fresh assessment process. The Court clarified that the consent order would not serve as a precedent regarding the violation of NJP principles.

In conclusion, the High Court of Madras disposed of the three writ petitions through a common order, emphasizing compliance with NJP and providing a framework for the reassessment process under the TNVAT Act.