2015 (5) TMI 337 - HC - VAT and Sales Tax

Determination of total taxable sales value - respondent has placed reliance upon some material which are not made available to assessee by the second respondent - violation of principles of natural justice - Held that - Perusal of the impugned proceedings would disclose that primary reliance was placed on the website entries relating to M/s.S.K.S. Industries, Coimbatore having TIN No.33732124475 and the assessment notice came to be passed on the basis of the said information. In the considered opinion of the Court, non-furnishing of information, result in prejudice to the petitioner to put forth his defence in proper and effective manner. - Decided in favour of assessee.

Summary

Issues: Violation of principles of natural justice in tax assessment based on website report.

The judgment by the High Court of Madras involved a writ petition where the respondent issued an assessment notice based on website entries without providing the petitioner with the relevant information. The petitioner, in response, filed an application under the RTI Act seeking details related to the website entries for sales with a specific company. The court noted that non-furnishing of information resulted in prejudice to the petitioner, hindering their ability to present a proper defense. Consequently, the court held that the impugned order was liable to be set aside due to the violation of principles of natural justice.

The court emphasized that the reliance on website entries without providing the petitioner access to the same information impeded the petitioner's defense. The judgment highlighted that the lack of information deprived the petitioner of the opportunity to respond effectively to the assessment notice. The court's decision to set aside the order was primarily based on the principle that the petitioner should have been given access to the website report to ensure a fair assessment process.

As a remedy, the court allowed the writ petition, setting aside the impugned order and directing the second respondent to furnish a copy of the website report to the petitioner within two weeks. The petitioner was then instructed to respond to the assessment notice within two weeks of receiving the report. Additionally, the first respondent was mandated to provide the petitioner with a personal hearing and dispose of the matter expeditiously in accordance with the law. The judgment concluded by stating that no costs were awarded, and the connected miscellaneous petitions were closed as a result of the decision.