2020 (3) TMI 193 - HC - VAT and Sales Tax

Principles of natural justice - imposition of penalty - exemption sought on sales to Special Economic Zone (SEZ) - opportunity for personal hearing denied for some issues - HELD THAT - Pursuant to order dated 28.06.2016, a notice has been sent only in respect of the period 2007-08 and only on the issue of exemption claimed as sales to SEZ. After considering the reply of the petitioner, this issue has been accepted in favour of the petitioner by the respondent. However, in regard to the remaining eight issues that formed the subject matter of the earlier assessments, he merely reiterates his conclusion in the original order of assessment. Learned counsel for the petitioner states that detailed objections had been filed even at the original instance to the eight issues and the original orders of assessment have in fact been set aside by order dated 07.04.2014. Clearly, no opportunity of hearing has been extended to the petitioner in respect of the remaining eight issues as well as penalty, pursuant to order of this Court dated 28.06.2016 - thus, there are no choice but to set aside the impugned order of assessment, simply for want of opportunity. Let the petitioner appear before the respondent on Monday, the 17 th February, 2020 at 10.30 a.m. without expecting any further notice in this regard - The assessments for the period 2007-08, 2008-09, 2010-11, 2011-12 and 2012-13 (all assessments, baring for the period 2007-08, still pending before the Assessing Authority) shall be taken up for hearing and after affording sufficient opportunity to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenging an order under the Tamil Nadu Value Added Tax Act, 2006 for the period 2007-2008.

Analysis:
The petitioner challenged an order dated 20.04.2018 under the Tamil Nadu Value Added Tax Act, 2006. The original orders of assessment dated 15.07.2015 dealt with nine issues and imposed a penalty for the periods 2008-09, 2010-11, 2011-12, and 2012-13. These orders were challenged in earlier writ petitions and were set aside, directing the Assessing Officer to provide a fresh hearing and pass orders in accordance with the law. Subsequently, new orders of assessment were passed on 15.07.2015, which were again challenged in writ petitions. The court discussed the issue of exemption sought on sales to Special Economic Zone (SEZ) and set aside the impugned order of assessment, remanding the matter for fresh consideration. Both the petitioner and the Department interpreted the order as setting aside the entire assessment.

After a notice was sent in respect of the period 2007-08 regarding the exemption claimed for sales to SEZ, the respondent accepted the petitioner's claim. However, the remaining eight issues from the earlier assessments were not reconsidered, and the original conclusions were reiterated without providing an opportunity for a hearing. Due to the lack of a hearing on these issues and the penalty, the court set aside the impugned order of assessment. The petitioner was directed to appear before the respondent without further notice on a specified date for a hearing on all pending assessments. Orders of assessment were to be passed within four weeks from the conclusion of the hearing. The writ petition was allowed, and no costs were imposed.

This judgment highlights the importance of providing a fair opportunity for a hearing and reconsideration of all issues in assessments under the Tamil Nadu Value Added Tax Act, 2006.