2018 (11) TMI 64 - HC - VAT and Sales Tax

Validity of revised assessment order - interstate-sale attracted CST or local sale - sale of Cardamom - Held that - Perusal of record shows that the petitioner was issued with an urgent notice dated 24.05.2018, directing them to appear for personal hearing on 30.05.2018. But, it is not stated by any of the parties that whether such an opportunity was availed by the petitioner. Even in the impugned order dated 31.05.2018, there is no whisper as to the same. If an aggrieved person raises certain contention in his/her reply, the authorities, while passing orders, have to specifically deal with the same in the manner known to law. In other words, the authority has to give his/her finding on all the grounds raised by the aggrieved persons. While answering the contentions, the authorities, exercising quasi-judicial powers, have to record the reasons for such holding - Admittedly, factual disputes have to necessarily be agitated before the appropriate authority, as rightly contended by the learned Additional Government Pleader. But, the order impugned suffers from violation of principles of natural justice. The matter is remitted back to the file of the second respondent for fresh consideration, while reserving all the grounds raised by the petitioner herein to raise before the authority - petition allowed by way of remand.

Summary

Issues:
Challenging revised assessment order under VAT Act, violation of principles of natural justice, factual disputes, failure to consider contentions in the order.

Analysis:
The writ petition challenges the revised assessment order passed by the second respondent under the VAT Act for the assessment year 2009-10. The petitioner, a company engaged in the sale of Cardamom, had filed returns which were accepted and approved. However, discrepancies were cited based on an inspection report, leading to a proposed revision of assessment. The petitioner objected to the proceedings, citing that it was an inter-state transaction falling under the CST Act rather than the TNVAT Act.

The petitioner contended that there were double entries in the bills mentioned in the notice, and despite submitting detailed representations, the impugned order did not address this issue. Citing a previous court decision, the petitioner argued that this constituted a violation of natural justice. The Additional Government Pleader argued that factual disputes should be raised before the appellate authority, rather than through a writ petition. It was highlighted that the petitioner was granted a personal hearing opportunity, indicating no breach of natural justice principles.

The court noted that the petitioner was directed to appear for a personal hearing but did not confirm if this opportunity was utilized. The impugned order failed to address the contentions raised by the petitioner regarding the mismatch in entries. The court emphasized that authorities must address all grounds raised by aggrieved parties and provide reasons for their decisions, as per established legal principles.

While acknowledging that factual disputes should be raised before the appropriate authority, the court found a violation of natural justice in the impugned order. Consequently, the order was set aside, and the matter was remitted back to the second respondent for fresh consideration. The court directed the respondent to fix a specific date for a hearing within two weeks and pass reasoned orders within four weeks thereafter, ensuring all contentions raised by the petitioner are addressed.

In conclusion, the writ petition was allowed, and no costs were imposed. The court emphasized the importance of following principles of natural justice and ensuring thorough consideration of all contentions in assessment proceedings.