2018 (9) TMI 549 - HC - VAT and Sales Tax

Principles of Natural Justice - opportunity of personal hearing not given - Validity of assessment order - TNVAT Act - CST Act - Held that - It is clear that before passing the impugned order, the petitioner has submitted his reply and sought for personal hearing. When that be so, the third respondent ought to have given an opportunity of personal hearing before passing the impugned order - In similar circumstances, a Hon ble Division Bench of this Court also in a decision Tvl.SRC Projects Private Limited Vs. the Commissioner of Commercial Taxes, 2008 (9) TMI 914 - MADRAS HIGH COURT , has categorically held that when request is made for a personal hearing, the Assessing Officer is bound to afford such an opportunity. Further, in the instant case, the Assessing Officer has admitted that the dealer has submitted his reply, but has ignored to note the specific request for personal hearing. This error would vitiate the impugned order of assessment. The matter is remanded to the third respondent / Assessing Officer for fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order under TNVAT Act for undisclosed purchase leading to additional tax and penalty without proper consideration of reply and opportunity of personal hearing.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, challenged the assessment order for the assessment year 2013-14 due to an alleged undisclosed purchase of ?94,37,556. The third respondent issued a notice proposing additional tax and penalty without considering the petitioner's reply and without providing a personal hearing. The petitioner contended that the impugned order was passed without following guidelines and sought to set it aside.

The petitioner's counsel argued that the impugned order failed to consider the petitioner's reply and the request for a personal hearing, as required by previous court decisions. The Additional Government Pleader contended that the petitioner had alternative remedies and did not avail the opportunity for a personal hearing. The court examined the records and notices issued by the third respondent, noting discrepancies in the timeline of responses and the lack of a personal hearing opportunity.

The court found that the petitioner had indeed requested a personal hearing in their reply dated 22.03.2018, which was received before the impugned order was passed. Citing a previous court decision, the court held that when a request for a personal hearing is made, the Assessing Officer must provide such an opportunity. The failure to do so in this case rendered the assessment order invalid.

Consequently, the court set aside the impugned order and remanded the matter to the Assessing Officer for fresh consideration. The Assessing Officer was directed to schedule a personal hearing within 15 days, allow the petitioner to peruse relevant documents, provide time for additional objections if necessary, and pass a reasoned order within 30 days of the personal hearing. The writ petition was allowed, and no costs were imposed.

In conclusion, the court's decision emphasized the importance of providing a personal hearing when requested and ensuring proper consideration of replies in assessment proceedings under the TNVAT Act.