2020 (9) TMI 785 - HC - VAT and Sales Tax

Rectification of mistake - Section 84 of the Tamil Nadu Value Added Tax Act, 2006 - reversal of Input Tax Credit - Despite objections filed by the petitioner, orders of assessment came to be passed by the Assessing Officer on 31.12.2019 - Non-speaking order - principles of natural justice - HELD THAT - The impugned orders are clearly contrary to law insofar as they are non-speaking and have been issued in violation of principles of natural justice, despite the specific request of the petitioner for personal hearing. Though the provisions of Section 84 of the Act do not specifically mandate an opportunity of personal hearing, except if the rectification is initiated suo motu at the instance of the Assessing Officer, it goes without saying that for fair disposal of a matter, an assessee/dealer should be heard in person in order to appreciate the contentions put forth prior to conclusion of the proceedings, all the more in a case where the dealer has specifically sought an opportunity of personal hearing. The impugned assessments and orders under Section 84 are set aside and will be redone de novo by the Assessing Officer. The petitioner will be heard by the Officer on Wednesday, the 9th of September, 2020 at 10.30 a.m., either virtually or by way of physical hearing as may be mutually convenient to the parties, to be communicated to the petitioner and orders shall be passed within a period of four (4) weeks from 09.09.2020. Petition disposed off.

Summary

Issues:
Challenge to order under Section 84 of Tamil Nadu Value Added Tax Act, 2006 - Non-speaking impugned orders - Violation of principles of natural justice - Opportunity of personal hearing not provided - Circular of Commissioner of Commercial Tax - Setting aside impugned assessments - Directions for redone assessments with personal hearing opportunity.

Analysis:
The petitioner challenged an order dated 23.06.2020, disposing of their application under Section 84 of the Tamil Nadu Value Added Tax Act, 2006. The petitioner received pre-assessment notices for the periods 2007-08, 2009-10, and 2010-11, proposing reversal of Input Tax Credit (ITC) in excess of the proposed amounts. Seeking rectification under Section 84, the petitioner specifically requested a personal hearing if their written response did not convince the Assessing Officer. Despite this, the impugned orders were issued on 23.06.2020, without providing a personal hearing, which the petitioner contended violated principles of natural justice.

During the proceedings, reference was made to a Circular of the Commissioner of Commercial Tax, highlighting the importance of giving assesses an opportunity to be heard before finalizing proceedings. The Circular emphasized the need for Assessing Officers to examine objections raised by dealers meticulously and pass speaking orders addressing the objections. It also stressed the mandatory provision of granting personal hearings, even if not explicitly requested by the dealer. The impugned orders were found to be non-speaking and issued without affording the petitioner a personal hearing, contrary to the principles outlined in the Circular and the requirements of natural justice.

In light of the above, the Court set aside the impugned assessments and ordered them to be redone de novo by the Assessing Officer. The petitioner was granted a hearing on a specified date, either virtually or physically, as mutually convenient. The Assessing Officer was directed to pass orders within four weeks from the hearing date. The writ petitions were disposed of accordingly, with connected miscellaneous petitions closed and no costs imposed.