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2019 (8) TMI 1017 - HC - VAT and Sales TaxLevy of penalty - Validity of revised assessment order - Section 27 of TNVAT Act - reasonable opportunity of showing cause - HELD THAT - It will be clear that there is no mention about proposal to levy penalty under Section 27(4) of TNVAT 2006 - proviso to Section 27(4) of TNVAT Act mandates that a dealer has to be given reasonable opportunity of showing cause before imposition of penalty under Section 27(4) of TNVAT Act. It is made clear that impugned order is set aside solely on the ground that writ petitioner has not been given an opportunity to show cause before passing an order of imposition of penalty under Section 27(4) of TNVAT Act. In other words, no opinion or view of this Court is expressed qua merits of the matter, more particularly qua impugned order. Petition allowed.
Issues: Impugned revised assessment order under Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) with penalty imposition; Lack of opportunity for the dealer to show cause before penalty imposition; Validity of the notice dated 01.04.2019 and penalty levy under Section 27(4) of TNVAT Act.
Analysis: 1. Impugned Revised Assessment Order and Penalty Imposition: The central issue in this case pertains to the revised assessment order passed under the TNVAT Act, which included the imposition of a penalty under Section 27(4) of the Act. The petitioner, a dealer under the TNVAT Act, had raised concerns regarding the lack of mention of the penalty in the initial notice dated 19.10.2015. The revised assessment order, issued on 13.06.2019, not only addressed the tax liability but also levied a penalty. The proviso to Section 27(4) of the TNVAT Act mandates that a dealer must be given a reasonable opportunity to show cause before the imposition of such a penalty. 2. Opportunity to Show Cause Before Penalty Imposition: The petitioner contended that they were not provided with an opportunity to present their case before the penalty was imposed, as required by law. The absence of any mention of the penalty in the initial notice raised concerns about procedural fairness and compliance with the statutory provisions of the TNVAT Act. The court emphasized the importance of affording the dealer a chance to be heard before any penalty is levied, highlighting the procedural safeguards enshrined in the legislation. 3. Validity of Notice Dated 01.04.2019 and Penalty Levy: The court scrutinized the communication dated 01.04.2019, which was referenced in the impugned revised assessment order. The petitioner asserted that they had not received this communication, raising doubts about the validity of the notice and the subsequent penalty imposition based on it. The respondent, unable to demonstrate the service of the notice, acknowledged the lack of evidence supporting the delivery of the communication. Consequently, the court set aside the impugned revised assessment order due to the petitioner's lack of opportunity to contest the penalty imposition, emphasizing the necessity of following due process and providing a fair hearing to the dealer. 4. Court's Order and Directions: In light of the procedural irregularities and the absence of an opportunity for the dealer to show cause before the penalty imposition, the court issued specific directives. The impugned revised assessment order was annulled, and the respondent was instructed to redo the assessment after granting the petitioner a fair opportunity to present their case. The revised assessment was mandated to be conducted promptly, within a specified timeframe, and served on the petitioner in accordance with the applicable rules under the TNVAT Act. The court's decision focused on upholding the principles of natural justice and ensuring procedural fairness in tax assessment proceedings.
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