2018 (4) TMI 284 - HC - VAT and Sales Tax

Levy of tax and penalty - sale of idli and dosai maavu (batter) - TNVAT Act - Held that - without expressing anything on the manner in which the 2nd respondent has passed the impugned order and with a view to ensure that justice is not only done, but it should be seen to be done, the matter is directed to be placed before some other officer of equivalent cadre. Petition allowed.

Summary

Issues:
Challenge to order rejecting waiver application based on representation regarding levy of tax and penalty on sale of idli and dosai maavu (batter) for assessment years 2009-2010 to 2016-2017. Request for placing matter before an officer of equivalent cadre due to involvement of 2nd respondent in advance ruling decision.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged the order by the 2nd respondent rejecting a waiver application regarding tax and penalty on the sale of idli and dosai maavu. The petitioner had sought clarification from the advance ruling authority, which was provided in a review order. The order clarified the tax liability on different types of batter, distinguishing between branded and unbranded products. Despite not challenging the advance ruling decision, the petitioner requested a waiver, which was denied by the 2nd respondent.

The petitioner contended that since the 2nd respondent was involved in the advance ruling decision, fairness required the matter to be handled by an officer of equivalent cadre to avoid any conflict of interest. The High Court acknowledged the need for impartiality and fairness in decision-making and directed the matter to be placed before another officer of equivalent cadre for a fresh decision on the waiver application. The Court emphasized the importance of ensuring justice is not only done but also seen to be done, highlighting the significance of procedural fairness in administrative decisions.

In light of the peculiar facts and circumstances of the case, the High Court allowed the writ petition, setting aside the impugned order and instructing the 1st respondent to assign the matter to a different officer of equivalent cadre. The Court mandated a personal hearing for the petitioner's representative before a decision is made on the waiver application. The interim order protecting the petitioner from coercive actions was to continue until compliance with the directive, to be completed expeditiously within three weeks. The judgment underscored the principle of natural justice and procedural fairness in administrative decision-making, ensuring transparency and impartiality in the process.