2017 (10) TMI 694 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - petitioner s case is that the pre-revision notice was served on the petitioner and the notice had been returned with postal endorsement left - Rule 19 of the TNVAT Act - Held that - this Court is of the view that the petitioner can be afforded one more opportunity to go before the Assessing Officer and put forth their objections as the pattern of assessment is identical to all the assessment orders and the revision of assessment itself is based upon report of the Enforcement Wing - the petitioner is to treat the impugned orders as show cause notices and submit their objections within a period of 15 days from the date of receipt of a copy of this order - matter on remand.

Summary

Issues:
Challenge to assessment orders under TNVAT Act for assessment years 2009-10 to 2014-15 based on procedural irregularities, lack of independent application of mind by Assessing Officer, and mismatch in details from official departmental website.

Analysis:

Procedural Irregularities:
The petitioner challenged the assessment orders on the grounds that the procedure under Rule 19 of the TNVAT Act was not followed regarding the service of notice. The petitioner claimed that the pre-revision notice was not properly served as it was returned with a postal endorsement "left." This lack of proper notice led to the petitioner being unaware of the assessment proceedings and the subsequent passing of the impugned orders. The High Court acknowledged this issue and directed the respondent to provide a copy of the assessment orders to the petitioner, allowing them to raise objections before the competent forum within a specified timeframe.

Lack of Independent Application of Mind:
Another ground of challenge was that the impugned assessment orders were solely based on a report from Enforcement officials, dated 12.06.2015, which directed the Assessing Officer to implement the proposal without independent assessment. The petitioner argued that this lack of independent application of mind by the Assessing Officer rendered the assessment orders invalid. The court recognized this concern but did not set aside the orders. Instead, it directed the petitioner to treat the orders as show cause notices and submit objections within 15 days. The respondent was instructed to provide a personal hearing and redo the assessment in compliance with the law.

Mismatch in Details from Departmental Website:
The third challenge raised by the petitioner was regarding the disallowance of their claim based on details obtained from the official departmental website. The petitioner alleged a mismatch between the returns filed and the data available on the website concerning another dealer. This discrepancy formed the basis for disallowing the claim. The High Court, considering the circumstances, granted the petitioner an opportunity to present objections before the Assessing Officer within a specified timeframe. No coercive action for recovery of tax and penalty was permitted until the reassessment was completed.

In conclusion, the High Court did not set aside the impugned assessment orders but allowed the petitioner to raise objections, ensuring a fair opportunity for the petitioner to present their case and have the assessment redone in accordance with the law.