2018 (7) TMI 1428 - HC - VAT and Sales Tax

Revision of assessment - escaped turnovers - TNVAT Act - Held that - The defects were found from the details obtained from web report. In the cases of mismatch on the basis of the details obtained from web report, it is incumbent on the Assessing Officer to enquire with the other end dealers and ascertain the correctness of the transaction made by the dealer and the returns filed by him. Without conducting an enquiry, simply, on the basis of the web report, a proposal cannot be sent without application of mind. In the instant case, no such application of mind appears to have been made by the Assessing Officer nor such proposal is made. Further, while passing final orders, objections raised by the dealer should have been considered, discussed and a reasoned order should have been passed. But, in the instant case, none of the settled procedures have been followed. The impugned order does not stand the test of law and accordingly, it is set aside and the matter is remanded back to the respondent for fresh consideration - petition allowed by way of remand.

Summary

Issues:
- Revision notice issued without proper reasoning
- Failure to consider objections raised by the dealer
- Violation of principles of natural justice in passing the order

Analysis:
1. Revision Notice Without Proper Reasoning:
The petitioner, a dealer in Mobile Phones, filed returns for the assessment year 2012-2013 under the Tamil Nadu Value Added Tax Act, 2006. The respondent issued a revision notice and a final order without setting out any reason for the decision. The High Court noted that the revision was based on details obtained from a web report on certain escaped turnovers. However, the final order contained a vague statement that was not understandable to the Court. The Court emphasized that in cases of mismatch based on web report details, the Assessing Officer must conduct an inquiry with other dealers to verify the transactions. In this instance, no such inquiry was conducted, and the proposal lacked proper application of mind, leading to a non-speaking order that violated established procedures.

2. Failure to Consider Objections:
The Court highlighted that while passing final orders, objections raised by the dealer should have been considered, discussed, and a reasoned order should have been passed. However, in this case, none of these procedures were followed. The order was passed without due consideration of the objections, which contravened the principles laid down in previous judgments and the principles of natural justice. The Court emphasized the importance of following established procedures and ensuring that objections are given due consideration before passing final orders.

3. Violation of Principles of Natural Justice:
The High Court found that the impugned order did not meet the legal standards and was set aside. The Court directed the matter to be remanded back to the respondent for fresh consideration in compliance with the principles laid down in previous judgments and the principles of natural justice. The respondent was instructed to pass a reasoned order after affording an opportunity of personal hearing to the petitioner within a specified timeframe. By allowing the writ petition and emphasizing compliance with legal principles, the Court upheld the importance of following due process and ensuring fair treatment in administrative decisions.

In conclusion, the High Court's judgment focused on the need for proper reasoning, consideration of objections, and adherence to principles of natural justice in administrative decisions under the Tamil Nadu Value Added Tax Act, 2006. The Court's detailed analysis underscored the importance of following established procedures and ensuring fairness and transparency in decision-making processes.