2018 (8) TMI 1563 - HC - VAT and Sales Tax

Validity of assessment order - violation of principles of natural justice - case of Revenue is that when the respondent has rejected the applications filed under Section 84 of the TNVAT Act, after affording an opportunity of personal hearing, the petitioner is not entitled to raise the very same issue before this Court. Held that - It is evident that when the Assessing Officer has called upon the petitioner to produce further documents on 12.02.2018 and again on 15.05.2018, he has not concluded the proceedings. It is also not in dispute that the petitioner furnished certain documents on receipt of such notices. Therefore, the requirement to comply with personal hearing arises only thereafter - In this case, admittedly, no such opportunity was given to the petitioner. In all fairness, the Assessing Officer should have intimated the date of personal hearing. It is not done in this case. It is true that the petitioner, on filing the application under Section 84 of the TNVAT Act, was called upon to appear in person and explain - providing such personal hearing, after passing the orders of assessment, though at the time of hearing the application filed under Section 84 of the TNVAT Act, is like putting the cart before the horse, since such opportunity of personal hearing, as contemplated by the respondent themselves, while issuing the notices of proposal, must have been provided before passing the orders of assessment and not thereafter, as has been done in this case. The matter is remitted back to the Assessing Officer to pass fresh orders of assessment in respect of each assessment year, after affording an opportunity of personal hearing, by indicating the date of such hearing - Appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment orders for assessment years 2009-2010, 2012-2013, and 2013-2014 based on violation of principles of natural justice by not providing an opportunity for personal hearing.

Analysis:
The petitioner challenged the assessment orders for the mentioned years, alleging a violation of natural justice principles due to the lack of a personal hearing opportunity. The petitioner contended that despite submitting explanations and additional documents in response to notices of proposal, the Assessing Officer did not provide a personal hearing before passing the assessment orders. The petitioner argued that this omission contravened the principles of natural justice, citing a previous court order as precedent.

The respondent, represented by the Government Advocate (Tax), argued that although no personal hearing was granted before the assessment orders, the petitioner had been given a personal hearing while filing applications under Section 84 of the Tamil Nadu Value Added Tax Act. The respondent contended that since the applications under Section 84 were rejected after a personal hearing, the petitioner could not raise the same issue while challenging the assessment orders.

After hearing both parties and examining the case materials, the court found that the notices of proposal clearly indicated the petitioner's right to a personal hearing within 15 days of receiving the notices. The petitioner had responded to the notices and provided additional documents in subsequent responses to the respondent's notices. However, the Assessing Officer did not provide the required personal hearing before finalizing the assessment orders, as mandated by the Circular No.7/2014 issued by the Principal Secretary/Commissioner of Commercial Taxes.

The court emphasized that the Assessing Officer should have informed the petitioner of the date for a personal hearing before passing the assessment orders. The court noted that providing a personal hearing after passing the assessment orders, as done in this case during the Section 84 applications, did not align with the principles of natural justice. Therefore, the court set aside the assessment orders solely on the grounds of the violation of natural justice principles. The matter was remitted back to the Assessing Officer to conduct fresh assessments for each year after affording the petitioner a proper opportunity for a personal hearing within eight weeks from the date of the court's order. No costs were awarded in the judgment, and connected miscellaneous petitions were closed.