2016 (1) TMI 276 - HC - VAT and Sales Tax

Revision of assessment - Non perusal of books of accounts - Held that - For the assessment year 2007-2008, notice was issued in the year 2013. Immediately, on receipt of the notice, the petitioner filed reply and personal hearing was conducted by one officer and after a period of two years, the assessment order came to be passed by a different officer, which has been challenged before this Court in W.P.No.19518 of 2015. This Court, for the same petitioner and on the same set of facts, earlier considered the claim of the petitioner and set aside the impugned order on the ground that the order came to be passed by a different officer, after a period two years - admittedly, the assessment order for the year 2008-2009 came to be passed after a period of two years, without providing opportunity of personal hearing. - Court finds it appropriate to give yet another opportunity to the petitioner. Hence the impugned order is set aside and the matter is remanded back to the respondent for passing fresh order - Decided in favour of assessee.

Summary

Issues:
1. Delay in passing the assessment order by the respondent.
2. Violation of principles of natural justice in not providing a personal hearing.
3. Challenge against the impugned order dated 31.03.2015.
4. Previous judgments on similar issues involving different officers.

Issue 1: Delay in passing the assessment order by the respondent:
The petitioner, a registered dealer under TNVAT Act and Central Sales Tax Act, engaged in works contracts for TWAD Board, faced a delay in the assessment order for the year 2012-2013. The enforcement wing officials conducted an inspection in 2012, leading to a notice for revision of assessment issued in 2013 without perusing the books of accounts. Despite the petitioner's objections and submission of purchase invoices, the assessment order was passed in 2015, causing a delay of two years. The delay was challenged on the grounds of lack of reasons provided by the respondent and the requirement for tax under TNVAT Act to be levied only on sales in Tamil Nadu.

Issue 2: Violation of principles of natural justice in not providing a personal hearing:
The petitioner highlighted a previous case for the assessment year 2007-2008 where a similar delay occurred. In that case, a different officer passed the assessment order after a personal hearing conducted by another officer, leading to a successful challenge in court. The court emphasized the necessity of providing a personal hearing before passing the assessment order, as mandated by Section 22(4) of the TNVAT Act. The current case for the year 2008-2009 also suffered from a lack of personal hearing before the assessment order was issued, further supporting the violation of principles of natural justice.

Issue 3: Challenge against the impugned order dated 31.03.2015:
The petitioner filed a writ petition seeking to quash the proceedings of the respondent dated 31.03.2015 due to the delay in passing the assessment order and the absence of a valid reason for the delay. The court found merit in the petitioner's arguments and set aside the impugned order, remanding the matter back to the respondent for fresh orders. The petitioner was directed to file objections within two weeks, and the respondent was instructed to pass orders within six weeks after considering the objections and providing a personal hearing, ensuring compliance with Section 23 of the TNVAT Act.

Issue 4: Previous judgments on similar issues involving different officers:
The court referred to previous judgments involving the same petitioner and similar delays in assessment orders passed by different officers. These cases highlighted the importance of adhering to principles of natural justice, specifically the right to a personal hearing before finalizing the assessment order. The court's decision to set aside the impugned order and remand the matter for fresh orders emphasized the need for procedural fairness and compliance with legal requirements.

This detailed analysis of the judgment from the Madras High Court addresses the issues of delay in assessment orders, violation of natural justice, challenges against the impugned order, and the significance of previous judgments in ensuring procedural fairness and legal compliance.