2022 (2) TMI 541 - HC - VAT and Sales Tax

Exemption from payment of tax - value of sale within the State was below ₹ 10,00,000/- during the respective Assessment Years - exemption from payment of tax and from filing returns under Section 21 and 3(1)(b) of the TNVAT Act, 2006 - violation of principles of natural justice - HELD THAT - The submission of the learned Government Counsel for the respondent cannot be countenanced in the light of the specific directions of this court - The said order makes it clear that order has to be passed after giving due opportunity of hearing to the petitioner. The impugned order has straight away proceeded to pass orders. Even otherwise, it is noticed that the impugned order has been passed in violation of Principles of Natural Justice and therefore the case has to be decided afresh. As the impugned order is contrary to the order passed by this Court, the impugned order stands quashed and the case is remitted back to the respondent to pass appropriate orders on merits and in accordance with law after giving an opportunity of hearing to the petitioner. The petitioner is directed to cooperate with the respondent - petition disposed off.

Summary

Issues:
1. Interpretation of Section 21 and 3(1)(b) of the TNVAT Act, 2006 regarding exemption from tax payment and filing returns.
2. Failure to dispose of an application under Section 84 of the TNVAT Act, 2006.
3. Allegation of passing orders without following Principles of Natural Justice.
4. Justification for passing orders under Section 22(4) of the TNVAT Act, 2006.
5. Contravention of court directions in previous litigation.

Analysis:
1. The petitioner claimed exemption from tax payment and filing returns under Section 21 and 3(1)(b) of the TNVAT Act, 2006, citing sales below a specified threshold for the relevant Assessment Years. The petitioner contended that the respondent had not disposed of an application under Section 84 of the Act, leading to subsequent litigation.

2. The petitioner argued that despite court directions to consider the pending application under Section 84, the respondent issued an order without providing a hearing, violating Principles of Natural Justice. The respondent defended the order citing the petitioner's failure to file returns and invoked Section 22(4) of the TNVAT Act, 2006, contending that the writ petition should be dismissed.

3. The court noted the specific directions in the previous order, emphasizing the need to provide a hearing before passing any orders. Finding a violation of Principles of Natural Justice, the court quashed the impugned order and remitted the case back to the respondent for fresh consideration with an opportunity for the petitioner to be heard.

4. Given the discrepancy between the impugned order and the court's directives, the court directed the respondent to pass appropriate orders within a specified timeframe, emphasizing cooperation from the petitioner. The writ petition was disposed of with these observations, highlighting the importance of adhering to court directions and Principles of Natural Justice in administrative proceedings under the TNVAT Act, 2006.