2020 (11) TMI 577 - HC - VAT and Sales Tax

Principles of natural justice - Validity of Assessment Order - no personal hearing afforded to the petitioner prior to completion of assessment - HELD THAT - The petitioner has not been afforded an opportunity of personal hearing prior to completion of assessment, the impugned order of assessment is set aside. The petitioner will appear before the respondent officer on Thursday, the 26th of November, 2020 at 10.30 a.m. without awaiting any further notice along with yet another copy of the documents relied upon by it in regard to its claim of ITC. Any material in relation to third party details obtained from the Departmental website and proposed to be relied upon by the authority shall be made available to the petitioner prior to completion of assessment. After consideration of the same and after hearing the petitioner in person, an order of assessment shall be passed de novo within a period of six (6) weeks thereafter. Petition disposed off.

Summary

Issues:
Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 for 2014-15 based on lack of natural justice - Alleged purchase omission and suppression - Opportunity of personal hearing not provided - De novo assessment ordered.

Analysis:
The petition challenges an assessment order dated 28.08.2020 under the Tamil Nadu Value Added Tax Act, 2006 for the fiscal year 2014-15. The primary contention is the violation of natural justice as the petitioner was not granted a personal hearing before the assessment was finalized. The assessing officer mentioned issuing two notices on 01.12.2016 and 19.02.2019, with the petitioner submitting documents on 28.02.2019 in support of their Input Tax Credit (ITC) claim. Despite this, the officer rejected the claim citing the petitioner's failure to meet the burden of proof as per Section 17 of the Act, focusing on alleged purchase omission of ?17,91,902/- and suppression of ?2,88,25,346/-.

Given the absence of a personal hearing before the assessment, the court set aside the impugned order. The petitioner is directed to appear before the respondent officer on 26th November 2020 at 10:30 a.m. without further notice, providing additional documents supporting their ITC claim. The authority is instructed to share any third-party details from the Departmental website intended for use in the assessment with the petitioner beforehand. Following this, a fresh assessment is to be conducted after hearing the petitioner, and the new order must be issued within six weeks.

In conclusion, the Writ Petition is disposed of with no costs, and the connected Miscellaneous Petition is closed. The judgment emphasizes the importance of affording parties a fair opportunity to present their case and participate in the assessment process, ensuring adherence to principles of natural justice and procedural fairness in tax matters.