2019 (8) TMI 1163 - HC - VAT and Sales Tax

Service of notices - case of petitioner is that that only one of the two revisional notices referred to in the impugned order have been received by writ petitioner and in any event, the impugned order has proceeded on the basis that writ petitioner dealer has not filed objections though the writ petitioner has sent objections/reply to the received revisional notice under due acknowledgement - principles of natural justice. HELD THAT - The common proviso to Sub-sections (1) and (2) of Section 27 makes it statutorily imperative that the Assessing Officer has to give a reasonable opportunity to show-cause against a revised Assessment Order - In the instant case, revisional notice dated 11.02.2019 has no doubt been sent to the writ petitioner, but the impugned order has been passed on the basis that the writ petitioner has not sent any reply to this notice though the reply/objection has been sent under due acknowledgement and reply /objections has been received by the office of the first respondent on 08.03.2019. Therefore, it is clear that impugned order proceeds on the basis that the writ petitioner / dealer has not shown cause though two revisional notices have been sent. In the considered opinion of this Court, this does not help the Revenue counsel in defending the impugned order as the impugned order, as mentioned supra, proceeds on the basis that the writ petitioner dealer has not responded at all - with regard to reasonable opportunity which the Assessing officer has to give to a dealer before passing a revised Assessment Order, in the instant case, notwithstanding the revisional notice dated 11.02.2019, first respondent/Assessing Officer in his discretion and wisdom has thought it necessary to send one more revisional notice on 05.04.2019. Thus, it is only proper that 05.04.2019 revisional notice is also now served on the writ petitioner/dealer - impugned order set aside - first respondent shall redo the revised Assessment and pass a revised Assessment Order afresh within six weeks therefrom - petition allowed by way of remand.

Summary

Issues:
1. Validity of the impugned order based on alleged discrepancies in the dealer's books of accounts.
2. Compliance with the statutory provisions under the TNVAT Act regarding revised assessment orders.
3. Adequacy of the dealer's responses to the revisional notices.
4. Requirement of a reasonable opportunity for the dealer to show cause before a revised assessment order is passed.

Issue 1: Validity of the Impugned Order
The writ petitioner, a dealer under the TNVAT Act, challenged the revised assessment order dated 28.06.2019, alleging discrepancies found during a surprise inspection by the Tax Department. The impugned order was contested primarily on the grounds that not all revisional notices were received by the dealer, leading to a flawed confirmation of the proposed turnover. The court noted that the impugned order lacked clarity on the legal provision it was based upon, clarified as Section 27(1)(a) of the TNVAT Act.

Issue 2: Compliance with Statutory Provisions
The court emphasized the statutory requirement under Section 27(1)(a) of the TNVAT Act, mandating the Assessing Officer to provide a reasonable opportunity for the dealer to show cause against a revised assessment order. Despite the dealer sending objections in response to a revisional notice, the impugned order erroneously proceeded on the assumption that no objections were filed. The court highlighted the importance of adherence to procedural fairness in assessment proceedings.

Issue 3: Adequacy of Dealer's Responses
The writ petitioner contended that while objections were sent in response to one revisional notice, the other notice was not received. The court acknowledged the receipt of objections by the Assessing Officer, emphasizing the need for proper consideration of the dealer's submissions. It noted that the dealer's request for additional documents did not undermine the validity of their objections, as the impugned order wrongly disregarded the dealer's responses.

Issue 4: Reasonable Opportunity for the Dealer
In assessing the actions of the Assessing Officer, the court highlighted the discretionary decision to issue a second revisional notice despite the dealer's earlier objections. The court directed the resenting of the second revisional notice to ensure the dealer's full participation in the assessment process. Emphasizing procedural fairness, the court outlined a timeline for the reassessment process, underscoring the importance of communication and acknowledgment in compliance with the TNVAT Act rules.

In conclusion, the court set aside the impugned order solely on procedural grounds, emphasizing the dealer's right to be heard and the necessity of a fair assessment process. The detailed directions provided aimed to ensure compliance with statutory provisions and the principles of natural justice in the assessment proceedings.