2019 (1) TMI 305 - HC - VAT and Sales Tax

Principles of Natural Justice - assessment in view of Section 22(2) of the TNVAT Act - opportunity of personal hearing not provided to the petitioner - Held that - It is not in dispute that the petitioner was served with pre-revision notices dated 29.05.2017, inviting objections, but, the petitioner did not respond. But still, it is mandatory on the part of the authorities to post the matter for personal hearing. As per the circular issued by the Head of the Department, pursuant to the recommendations issued by the Justice Ramanujam Committee, it is mandatory to give an opportunity of personal hearing, by specifying the dates of such personal hearing, whether it is asked or not by the petitioner. But, in the impugned order, there is no whisper as to the same. Division Bench of this Court in an unreported decision in G.V.Cotton Mills (P) Ltd., Rep. by its Managing Director Vs. The Assistant Commissioner (CT), Avarayampalayam Assessment Circle Corporation of Shopping Complex, Coimbatore), 2018 (3) TMI 1617 - MADRAS HIGH COURT , has held that failure to submit objection to the pre-assessment notice would not give a right to the Assessing Officer to deny opportunity of personal hearing. This Court is of the view that the matter should be remanded for fresh consideration - petition allowed by way of remand.

Summary

Issues:
Challenging revised assessment orders without personal hearing opportunity.

Analysis:
The writ petitions challenged revised assessment orders issued by the respondent without providing the petitioner with an opportunity for personal hearing. The petitioner, a dealer in Two Wheeler spare parts, filed timely returns for the assessment years 2013-14 to 2015-16. However, discrepancies were found in the tax returns based on inspection and web reports. The respondent issued pre-revision notices on 29.05.2017, but due to the proprietor's ill health, the petitioner could not respond immediately. The impugned orders were passed without granting a personal hearing, leading to the petitions before the court.

The respondent contended that show cause notices were issued to the petitioner on 29.05.2017, but the petitioner did not respond, prompting the respondent to proceed with the matter and pass the impugned orders on 28.03.2018. The court noted that while the petitioner did not respond to the pre-revision notices, authorities are obligated to schedule a personal hearing as per circulars. The court cited a previous decision emphasizing that failure to submit objections does not justify denying the right to a personal hearing.

Based on the failure to provide a personal hearing, the court decided to remand the matter for fresh consideration. The impugned orders were set aside, and the case was sent back to the respondent for reevaluation. The court also highlighted that the impugned orders were based on discrepancies between buyer and seller particulars. Referring to a previous judgment, the court outlined the procedure for assessing officers in cases of mismatch, emphasizing the need for proper enquiry and communication with dealers.

The court directed the respondent to reconsider the matter in light of the previous judgment, requiring the petitioner to respond within two weeks and attend a hearing within a further two weeks. The respondent was instructed to issue a reasoned order within four weeks after the hearing. The court emphasized that non-cooperation from the petitioner during the enquiry could lead to appropriate orders being passed. Finally, all writ petitions were allowed without costs, and connected miscellaneous petitions were closed.