2016 (10) TMI 143 - HC - VAT and Sales Tax

Principles of natural justice - validity of assessment order - opportunity of personal hearing - inability to submit effective objection in the absence of details - Held that - emphasis given in the need for giving an opportunity of personal hearing, since the order of assessment to be passed by a process of dialogue and discussions. Matter remanded - the assessment to be redone, after giving details of the Web Report and giving an opportunity to the petitioner to submit additional objections - finalise the assessment, after affording the opportunity of personal hearing to the petitioner - writ petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to proceedings dated 15.6.2016 under TNVAT Act and Entry Tax Act - Violation of principles of natural justice - Opportunity of personal hearing denied - Assessment based on defects without discussion of objections - Need for re-assessment with proper opportunity for objection submission and personal hearing.

Analysis:

1. Challenge to Proceedings under TNVAT Act and Entry Tax Act:
The petitioner, a dealer in excavators and spares, challenged the respondent's proceedings dated 15.6.2016 under the TNVAT Act and the Entry Tax Act. The petitioner had made inter-state purchases of excavators and paid entry tax under the Entry Tax Act. Sales of excavators to local customers involved VAT collection. The petitioner sought relief due to alleged defects in the assessment process.

2. Violation of Principles of Natural Justice - Opportunity of Personal Hearing Denied:
The petitioner contended a violation of natural justice principles as the respondent completed the assessment without granting a personal hearing. Despite the petitioner's plea for a personal hearing in response to the Pre-Revision Notice, the respondent proceeded with the assessment without affording this opportunity. The court emphasized the importance of a dialogue in the assessment process and noted the lack of personal hearing as a ground for challenge.

3. Assessment Based on Defects without Discussion of Objections:
The Enforcement Wing Officials conducted a surprise inspection leading to a Pre-Revision Notice highlighting defects. The petitioner responded with detailed objections, including a request for a personal hearing. However, the respondent did not discuss these objections and completed the assessment. The court found this failure to address objections as a flaw in the assessment process.

4. Need for Re-Assessment with Proper Opportunity for Objection Submission and Personal Hearing:
Given the lack of a personal hearing and failure to provide necessary details like the Web Report to the petitioner, the court ordered a re-assessment. The court directed the respondent to furnish the Web Report details, allow the petitioner to submit additional objections, and conduct the assessment after affording a personal hearing. The aim was to ensure a fair assessment process in compliance with the principles of natural justice.

In conclusion, the court allowed the writ petition, set aside the impugned order, and remanded the matter to the respondent for fresh consideration. The court's decision aimed to rectify the procedural shortcomings and ensure a fair assessment process by providing the petitioner with a proper opportunity for objection submission and a personal hearing.