2020 (3) TMI 1091 - HC - VAT and Sales Tax

Principles of Natural Justice - Validity of assessment order - main ground of attack by the petitioner is that no opportunity was granted to the petitioner for production of documentary evidence before the authority for passing appropriate orders - HELD THAT - Admittedly, the cause of action for issuing the pre-revision notices was on the basis of the proposal submitted by the Enforcement Wing Officials, pursuant to an inspection conducted in the place of business of the petitioner. When the petitioner submitted their objections to the pre-revision notices, the Assessing Officer has to independently adjudicate the matter and he shall not be influenced by the directions issued by the Enforcement Wing Officials. But he has not done so in this case. Further, no reasonable opportunity was provided to the petitioner for production of necessary documentary evidence before the authority for passing appropriate orders, as per Section 27(2) of the TNVAT Act. This Court is inclined to set-aside the assessment orders dated 29.10.2015 and are set-aside accordingly. The matters are restored to the file of the Assessing Officer / first respondent - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders dated 29.10.2015 for multiple years under TNVAT Act and CST Act. Lack of opportunity to present evidence. Alleged discrepancies in inspection report. Violation of quasi-judicial principles.

Analysis:

The petitioner, engaged in the business of water treatment plants, challenged assessment orders for several years under TNVAT Act and CST Act. The Enforcement Wing Officials alleged defects during an inspection, leading to notices and objections submitted by the petitioner. The Assessing Officer passed the impugned orders without considering the objections properly, raising concerns about the verification of buyer and seller. The petitioner contended that no opportunity was given to produce documentary evidence, citing a previous Division Bench ruling emphasizing the quasi-judicial nature of the Assessing Officer.

The court noted that the pre-revision notices were based on the Enforcement Wing's proposal, but the Assessing Officer failed to independently adjudicate the matter, as required by law. Additionally, the petitioner was not provided with a reasonable opportunity to present necessary documentary evidence, as mandated by Section 27(2) of the TNVAT Act. Despite the petitioner remitting 25% of the disputed tax, the impugned assessment orders were set aside due to procedural irregularities.

The judgment set aside the assessment orders and directed the matters to be restored to the Assessing Officer. The petitioner was instructed to submit documentary evidence within two weeks to support their claim of non-taxable transactions. The Assessing Authority was tasked with reviewing the evidence and objections, providing a personal hearing to the petitioner, and issuing appropriate orders within six weeks. The writ petitions were allowed without costs, and the connected Miscellaneous Petitions were closed.