2019 (8) TMI 666 - HC - VAT and Sales Tax

Validity of revised assessment order - deemed assessment - reasonable opportunity to show cause not provided - proviso to Section 27(2) of TNVAT Act - HELD THAT - Unfortunately, in the files of the Department there is no notice or nothing has been mentioned about the personal hearing though the aforesaid copies of revisional notices dated 07.04.2017 and 31.01.2018 wherein opportunity of personal hearing has been granted form part of the files. Therefore, this Court is of the considered view that the ideal way to put an end to this controversy is to afford a personal hearing opportunity to the writ petitioner and direct the respondent to redo the revised assessment. Petition allowed by way of remand.

Summary

Issues:
1. Whether the impugned order under Section 27(2) of the TNVAT Act was passed without affording a reasonable opportunity to show cause?
2. Whether a personal hearing was granted to the writ petitioner before passing the impugned order?
3. What is the appropriate course of action to resolve the dispute regarding the personal hearing?

Analysis:

Issue 1:
The impugned order under Section 27(2) of the TNVAT Act was challenged on the grounds that it was passed without providing a reasonable opportunity to show cause. The proviso to Section 27(2) mandates a reasonable opportunity to show cause but does not explicitly require a personal hearing. However, in this case, the respondent chose to grant a personal hearing to the writ petitioner, as evidenced by the revisional notices and objections exchanged. The court emphasized the importance of the personal hearing in such cases.

Issue 2:
The main contention revolved around whether a personal hearing was actually granted to the writ petitioner as claimed by the Revenue Counsel or denied as asserted by the writ petitioner. Despite conflicting statements, it was observed that there was a factual dispute regarding the personal hearing. The court examined the records of the Department and found no mention of the personal hearing, leading to the decision to afford the writ petitioner a fresh personal hearing opportunity to resolve the controversy.

Issue 3:
To address the dispute and ensure procedural fairness, the court set aside the impugned order solely on the ground of the lack of clarity regarding the personal hearing. It directed the respondent to conduct a fresh revised assessment exercise after providing a personal hearing to the writ petitioner. The court specified the timeline for the revised assessment and emphasized the importance of communication in accordance with the TNVAT Act rules.

In conclusion, the writ petition was disposed of with directions for a new personal hearing, emphasizing the significance of procedural fairness and adherence to statutory provisions in matters of assessment under the TNVAT Act.