2016 (11) TMI 496 - HC - VAT and Sales Tax

Validity of order of assessment dated 11.7.2016 - TNVAT Act, 2006 - violation of principles of natural justice - Held that - The respondent seeks to take umbrage under the notice issued by the first respondent dated 22.8.2016 and to state that the petitioner was given opportunity. Unfortunately, the second respondent failed to note that the impugned order of assessment is dated 11.7.2016 and therefore, the notice issued by the first respondent dated 22.8.2016, could have no bearing on the impugned assessment. That apart, even assuming that notice was issued by the first respondent on 22.8.2016, the same was received by the petitioner only on 6.9.2016. However, even prior to that the impugned order of assessment has been passed on 11.7.2016, despatched belatedly and received by the petitioner on 6.9.2016. Thus, it is evidently clear that there is total violation of principles of natural justice and the second respondent has clearly abdicated his duties as an Assessing Officer. Revision of assessment u/s 84 of the TNVAT Act - Held that - the AO has to be well aware of the fact that under the provisions of law, he is exercising his jurisdiction, when admittedly he has not passed the order of assessment and there is no Petition u/s 84 of the TNVAT ACT, filed by the dealer or there is no exercise of suo motu power by the second respondent, reference to section 84 of the Act is wholly unsustainable. Writ Petition allowed - respondent is directed to issue fresh notice, giving full particulars and affording an opportunity of fifteen days, to submit their objections and after the objections are received, the second respondent shall afford an opportunity of personal hearing and redo the assessment in accordance with law - decided in favor of petitioner.

Summary

Issues: Violation of principles of natural justice in assessment order under TNVAT Act, 2006; Misinterpretation of law in revising assessment under section 84 of TNVAT Act.

Violation of Principles of Natural Justice:
The petitioner, a manufacturer and trader of refined oil registered under the TNVAT Act, challenged an assessment order dated 11.7.2016, for the year 2013-14, primarily on the ground of a lack of pre-revision notice, alleging a violation of natural justice. The petitioner claimed that the notice referred to in the order was not issued to them, and a notice received later was dispatched belatedly. The court found that the impugned order was passed before the petitioner received the notice, indicating a clear violation of natural justice. The second respondent's contention that a notice issued later provided an opportunity was dismissed as irrelevant due to the timing discrepancy, leading to a conclusion of an abdication of duties by the Assessing Officer.

Misinterpretation of Law in Revising Assessment:
Another issue highlighted was the incorrect invocation of section 84 of the TNVAT Act by the second respondent during the assessment process. The court noted that the power under section 84 can only be exercised after completing the assessment proceedings, not during the revision under section 27. The respondents' argument of misquoting the law was rejected, emphasizing that the Assessing Officer should have been aware of the correct jurisdiction under the law. The court deemed the reference to section 84 as unsustainable, further supporting the interference in the impugned order.

Judgment:
In conclusion, the High Court allowed the Writ Petition, quashed the impugned order, and directed the second respondent to issue a fresh notice, provide an opportunity for objections submission, conduct a personal hearing, and redo the assessment in compliance with the law. The court emphasized the importance of upholding principles of natural justice and correct interpretation of legal provisions in assessment proceedings under the TNVAT Act, 2006.