2019 (6) TMI 809 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT 2006 - Principles of natural justice - lack of jurisdiction - alternate remedy - HELD THAT - A perusal of the impugned order reveals that the respondent has not given personal hearing to the writ petitioner notwithstanding the specific and categoric direction in this regard in the earlier aforesaid order made by another Hon ble Single Judge. It is in the considered view of this Court is unfortunate. This order is being passed with the hope that such a situation and predicament does not occur in days to come. Be that as it may a perusal of the impugned order also reveals that the writ petitioner has an appeal remedy by way of appeal before the Appellate Deputy Commissioner (ST) (East) Greams Road Chennai - 06. It emerges clearly that in the instant case there has been violation of NJP. It is not only violation of NJP but it is violation of NJP on the teeth of specific directions of this Court in the aforesaid previous order ie. order directing the respondent to give an opportunity of personal hearing - there is no difficulty in exercising writ jurisdiction and interfering with the impugned order notwithstanding alternate remedy in the instant case. Petition disposed off.

Summary

Issues:
Violation of principles of natural justice in assessment proceedings under Tamilnadu Value Added Tax, 2006 (TNVAT) - Failure to provide personal hearing to the writ petitioner despite court directions.

Detailed Analysis:

Issue 1: Violation of Principles of Natural Justice
The writ petition involved a challenge to an Assessment Order dated 08.02.2019 passed without providing the writ petitioner with a personal hearing, contrary to specific court directions in a previous order. The court noted the absence of personal hearing as a clear violation of principles of natural justice, as confirmed by the Revenue Counsel's acknowledgment that no such opportunity had been granted to the petitioner. This violation was deemed significant and indisputable, justifying the exercise of writ jurisdiction despite the availability of an alternate remedy through appeal.

Judicial Precedents and Alternate Remedy:
The judgment referenced established legal principles regarding the discretion to exercise writ jurisdiction even when an alternate remedy exists. While the rule of alternate remedy is not absolute, the court highlighted exceptions recognized by the Supreme Court, including lack of jurisdiction, violation of natural justice, and ineffectiveness of the alternate remedy. Notably, the violation of natural justice, especially in the face of specific court directions, was deemed a valid ground for bypassing the alternate remedy requirement.

Court Order and Directions:
In light of the violation of natural justice and the court's assessment of the situation, the High Court set aside the impugned Assessment Order dated 08.02.2019. The respondent was directed to conduct a fresh assessment, emphasizing adherence to the principles laid down by the court in a previous case regarding the necessity of independent adjudication beyond proposals from the Enforcement Wing. The court mandated that the respondent provide the writ petitioner with a personal hearing, allowing the company's authorized representative to submit supporting documents. The timeline for the reassessment process was set at four weeks from the date of the court order.

Conclusion:
The judgment addressed the issue of procedural fairness in assessment proceedings under TNVAT, highlighting the importance of upholding principles of natural justice, especially when specific court directions are in place. By setting aside the Assessment Order and providing detailed directions for a fresh assessment with proper adherence to legal principles, the court ensured a fair and just resolution while underscoring the significance of procedural regularity in administrative actions.