2023 (2) TMI 888 - HC - VAT and Sales Tax

Validity of impugned Auction Notice - properties are brought for auction for non payment of tax and penalty of petitioner - non-application of mind in issuance of SCN - Rejection of the Rectification Petitions filed by the petitioner under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006 - No reasons given for rejection of application - violation of principles of natural justice. HELD THAT - As seen from Section 84 of the Tamil Nadu Value Added Tax Act, 2006, only in cases where there is an error apparent on the face of the record, the rectification of an assessment order can be entertained. The first respondent under the impugned order has categorically held that no case has been made out by the petitioner for rectification of the assessment orders. The proviso to Section 84 of the Tamil Nadu Value Added Tax Act, 2006 also makes it clear that only in cases where the authority decides to revise the assessment, there is a necessity for granting an opportunity of hearing to the dealer (the petitioner herein). In the case on hand, the authority, while deciding the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, has not revised the earlier assessment orders passed by the respondents and therefore, has rightly not granted any opportunity of hearing to the petitioner. No specific request for personal hearing was also sought for by the petitioner. Admittedly, only after a lapse of almost five years from the date of the assessment orders, the petitioner has filed the Rectification Petitions in the year 2018 even without filing a Statutory Appeal as against the assessment orders dated 28.01.2013 and 15.10.2013 pertaining to the relevant assessment years 2007-08 to 2011-12. The first respondent has also observed that having not exercised the statutory appeal as directed by this Court in its order dated 18.06.2019 passed in W.P. No.6309 of 2017, the petitions filed under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006, by the petitioner seeking for rectification of the assessment orders cannot be entertained under any circumstances whatsoever. This Court does not find any infirmity in the said observation after seeing the conduct of the petitioner, the details of which are observed in the earlier paragraph of this order which will reveal that only to protract the inevitable, the Rectification Petitions have been filed - Petition dismissed.

Summary

Issues:
Challenge to Auction Notice based on rejection of Rectification Petitions under Section 84(1) of Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner challenged the Auction Notice issued by the first respondent after the rejection of Rectification Petitions under Section 84(1) of the Tamil Nadu Value Added Tax Act, 2006 for the assessment years 2007-08 to 2011-12. The petitioner raised several grounds of challenge, including the non-application of mind, lack of adherence to natural justice principles, and arbitrary rejection of petitions without considering pending writ petitions. The petitioner argued that no reasons were provided for the rejection of the petitions and highlighted the delay in filing due to a challenge to a specific provision in the Act. The petitioner emphasized potential irreparable loss due to the auction of properties and disputed the imposition of a 150% penalty, subject of the rejected Rectification Petitions.

The petitioner contended that the rejection of petitions and subsequent Auction Notice were arbitrary and erroneous, emphasizing the lack of reasons provided for rejection and absence of a personal hearing. The petitioner raised concerns about the timing of the rejection in relation to pending writ petitions and potential hardship from property auction. The Government Advocate for the first respondent highlighted the petitioner's history of non-compliance with previous court orders and delays in filing Rectification Petitions after assessment orders. The respondent argued that the petitioner's failure to exercise statutory appellate remedies rendered the writ petition unsustainable after a significant lapse of time from the assessment orders.

The judgment emphasized the undisputed facts, including the petitioner's failure to file a Statutory Appeal against assessment orders, delayed filing of Rectification Petitions, and non-compliance with previous court orders. The court analyzed Section 84 of the Tamil Nadu Value Added Tax Act, 2006, which allows rectification of errors apparent on the face of the record. The court noted that the rejection of petitions was justified as no revision of assessment orders occurred, warranting a hearing. The court rejected the petitioner's argument for personal hearing based on previous cases and highlighted the petitioner's significant delay in filing Rectification Petitions.

The court reviewed the order rejecting the Rectification Petitions and observed the petitioner's conduct, including failure to exercise statutory appeal rights as directed by the court in a previous case. The court found no merit in the petitioner's claims, noting the attempt to prolong the inevitable through delayed Rectification Petitions. Consequently, the court dismissed the writ petition and upheld the Auction Notice, concluding that no interference was warranted. The judgment closed the case without costs, indicating the end of the legal proceedings.