2019 (6) TMI 1312 - HC - VAT and Sales Tax

Deemed assessment - initiation of proceedings for making assessment on best judgment method - Section 22(4) of TNVAT Act - reassessment under Section 22(6) of TNVAT Act - HELD THAT - Leaving this question as to whether personal hearing is imperative for a revision under Section 22(6) of TNVAT Act open, considering the peculiar facts and circumstances of this case, this Court held that impugned assessment order dated 27.02.2017 as well as the order passed in the revision being order dated 29.04.2019 are set aside - petition disposed off.

Summary

Issues:
1. Assessment of tax liability under TNVAT Act for the assessment year 2015-16.
2. Rejection of revision petition seeking reassessment under Section 22(6) of TNVAT Act.
3. Requirement of personal hearing for revision under Section 22(6) of TNVAT Act.

Analysis:
1. The writ petitioner had purchased cement and steel for construction purposes during the assessment year 2015-16 but did not file monthly returns under the TNVAT Act. Consequently, the respondent initiated assessment proceedings under Section 22(4) of the TNVAT Act using the best judgment method. An order was passed fixing the tax liability and imposing a penalty.

2. Subsequently, the writ petitioner filed a revision seeking reassessment under Section 22(6) of the TNVAT Act, contending that the goods were used solely for construction of an educational institution and that the turnover was below a certain threshold. The revision remained dormant until a reminder was sent, following which the respondent rejected the revision under Section 22(6) of the TNVAT Act without granting a personal hearing.

3. The writ petitioner argued that a personal hearing would have allowed them to demonstrate that there was no sale of the goods and that the turnover was below the specified limit. The Revenue counsel, however, pointed out that there is no provision for a personal hearing in the context of a revision under Section 22(6) of the TNVAT Act. The court, while leaving the question of the necessity of a personal hearing open, set aside the assessment and revision orders to facilitate a personal hearing for the writ petitioner.

4. The court ordered the writ petitioner to pay 15% of the tax due before the scheduled personal hearing, failing which the impugned orders would stand revived. If the payment is made, a fresh personal hearing would be conducted, and the respondent would reconsider the revision and pass fresh orders within a specified timeline. The communication of the revised order to the writ petitioner was also mandated within a set timeframe.

5. The judgment concluded by disposing of the writ petition on the mentioned terms without imposing any costs, and the connected miscellaneous petition was closed accordingly.