2019 (7) TMI 245 - HC - VAT and Sales Tax

Validity of Deemed assessment - It is the case of the writ petitioner that writ petitioner was filing monthly Returns under Section 21 of TNVAT Act and there was deemed assessment under Section 22(2) of the TNVAT Act - writ petitioner submitted that respondent has accepted the proposal of the Enforcement Wing, without making an independent assessment - principles of natural justice - HELD THAT - Circular, being Circular No.7/2014 (BB1/3589/2014) dated 3rd February, 2014 issued by the Principal Secretary / Commissioner of Commercial Taxes which says in a recommendatory tone that personal hearing shall invariably be afforded to dealers irrespective of whether they are opt for the same or not as respondent in its discretion has considered it necessary to give personal hearing. Violation of principle laid down in the case of NARASUS ROLLER FLOUR MILLS VERSUS THE COMMERCIAL TAX OFFICER 2015 (4) TMI 361 - MADRAS HIGH COURT - HELD THAT - Learned Revenue Counsel adverting to the counter submitted that the writ petitioner in any event had not produced TDS Certificates and therefore it cannot be gainsaid that Narasus principle has been violated. Deduction of TDS - HELD THAT - Writ petitioner, on instructions, submitted that the TDS Certificates are now available and if personal hearing is granted, writ petitioner will be able to produce the TDS Certificates relevant to the aforesaid seven assessment years. Petition allowed by way of remand.

Summary

Issues:
1. Deemed assessment under TNVAT Act
2. Delay in issuing TDS Certificates
3. Lack of personal hearing in assessment process
4. Violation of Narasus principle

Deemed Assessment under TNVAT Act:
The case involved seven writ petitions related to assessment orders under the Tamil Nadu Value Added Tax Act, 2006. The petitioner, a contractor executing civil works for government departments, had closed down the business in 2015. The assessment orders covered the years 2009-2010 to 2015-2016, with changes in deemed assessment timelines over the years.

Delay in Issuing TDS Certificates:
The petitioner claimed that tax was deducted at source by government authorities for the civil works done, but there was a delay in issuing TDS Certificates. This delay led to an inspection by tax department officers, resulting in notices for objections and documents sent to the petitioner for each assessment year.

Lack of Personal Hearing in Assessment Process:
Despite the petitioner's requests for personal hearings in their replies to the notices, the respondent passed revised assessment orders without granting a personal hearing. The petitioner cited Circular No.7/2014, emphasizing the importance of personal hearings in assessment procedures.

Violation of Narasus Principle:
The petitioner argued that the respondent accepted the Enforcement Wing's proposal without conducting an independent assessment, contrary to the Narasus principle established in a previous judgment. The respondent contended that the petitioner had not produced TDS Certificates, but the petitioner assured that they could provide the certificates if a personal hearing was granted.

The court set aside the impugned orders solely for facilitating a personal hearing, without expressing any opinion on the merits. A specific date for personal hearing was fixed, and the petitioner undertook to produce all relevant documents. Failure to attend the hearing would result in the revival of the impugned orders, while attendance would lead to revised assessment orders within a specified timeframe. The court disposed of all seven writ petitions with these directions, emphasizing the importance of a fair assessment process.