2018 (11) TMI 2 - HC - VAT and Sales Tax

Validity of Assessment Order - TNVAT Act - petitioner has sought for an opportunity of being heard to explain the real facts, which was not provided - Principles of Natural Justice - Held that - Even though the petitioner has given elaborate submissions and objections, the impugned order does not appear to have dealt with the objections elaborately. In many of the proposals, the objections were rejected on the ground that the required materials were not available with the authority. The case laws submitted by the petitioner were also not considered while taking a decision - Moreover, there is nothing on record to show that the materials, on the basis of which the respondent proposed to re-assess, were supplied to the petitioner and he was sought to explain the same. On the other hand, the dealer himself made a request to summon the sellers for the purpose of cross-examining them to elucidate the fact. The matter is remanded back to the respondent for fresh consideration - petition allowed by way of remand.

Summary

Issues:
1. Violation of principles of natural justice in assessment proceedings under TNVAT Act and CST Act.

Analysis:
The petitioner, a registered dealer under the TNVAT Act and CST Act, challenged an order passed by the respondent alleging a violation of principles of natural justice. The petitioner, engaged in the business of manufacturing edible oil and trading in pulses and grams, had their returns for the assessment year 2011-12 deemed assessed under Section 22(2) of the TNVAT Act. Subsequently, discrepancies were found during a surprise inspection by the Enforcement Wing officials, leading to a revision notice issued by the respondent. The petitioner objected to the proposals made by the assessing authority, requesting a personal hearing and the summoning of sellers for cross-examination as per Sections 81 and 82 of the TNVAT Act. The respondent passed the impugned order dated 17.09.2018 without adequately addressing the objections raised by the petitioner, leading to the present writ petition.

The learned Government Advocate argued that the petitioner had been given an opportunity to respond to a pre-revision notice and that the impugned order was passed after considering the petitioner's detailed representation. However, upon review, the Court found that the impugned order did not sufficiently address the objections raised by the petitioner. The Court noted that the objections were rejected on grounds of unavailability of materials with the authority, and the case laws submitted by the petitioner were not considered. Additionally, the Court observed that the petitioner's requests for personal hearing and cross-examination of sellers were not granted by the assessing authority, contravening the principles of natural justice.

Referring to a relevant unreported decision by a Division Bench of the Court, the Court emphasized that failure to submit objections to a pre-assessment notice does not entitle the assessing authority to deny the assessee an opportunity of personal hearing. Based on this legal principle, the Court set aside the impugned order as violative of natural justice and remanded the matter back to the respondent for fresh consideration. The respondent was directed to issue a fresh notice to the petitioner, provide an opportunity for objections and a specific date for a hearing, ensuring compliance with the principles of natural justice. The Court allowed the writ petition in favor of the petitioner, with no costs incurred, and closed the connected miscellaneous petition.