2021 (1) TMI 63 - HC - VAT and Sales Tax

Violation of principles of Natural Justice - validity of assessment orders passed under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 - it is the case of the petitioner that despite the reply and without furnishing the documents sought for in their reply, the impugned assessment orders have been passed in violation of the principles of natural justice - HELD THAT - The petitioner on receipt of the notice issued under Section 27 (2) of the Tamil Nadu Value Added Tax Act, 2006, has sent a reply on 23.03.2020, wherein, they have requested the respondents to provide the bill and date wise details for unreported purchases which the second respondent claims that the petitioner had suppressed - As seen from the assessment orders dated 16.11.2020, no explanation has been given by the second respondent as to why they are unable to provide the bill and date wise details for the alleged un -reported purchases made by the petitioner from the Spices Board, Cochin. The second respondent has mechanically accepted the audit report of the Accountant General and has come to the conclusion that there is suppression of purchases made from the Spices Board, Cochin, by the petitioner. When the petitioner has categorically denied any suppression of purchases, the second respondent ought to have furnished details of the alleged purchases made from the Spices Board, Cochin, to the petitioner As seen from the impugned assessment orders, the second respondent has mechanically accepted the audit report without any independent assessment and without affording sufficient opportunity to the petitioner to place their objections in the revision of assessment proceedings under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 - Matter is remanded back to the second respondent for fresh consideration and the second respondent shall pass final orders on merits and in accordance with law after giving adequate opportunity to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for assessment years 2012-2015 based on violation of natural justice principles.

Analysis:
The petitioner contested the assessment orders, alleging that the second respondent violated natural justice principles by merely accepting the audit report without conducting an independent assessment. The petitioner had requested bill and date wise details for alleged unreported purchases, but the respondent failed to provide this information, leading to the challenge through Writ Petitions.

The petitioner emphasized that all purchases were duly reported in monthly returns and 'C' Forms were issued for said purchases. Despite requests for specific details and documents, the assessment orders were passed without fulfilling these requests, indicating a breach of natural justice principles.

The respondent argued that adequate opportunity was given during assessment proceedings, including a personal hearing, which the petitioner allegedly did not utilize. The respondent contended that the appropriate remedy for the petitioner was to file a statutory appeal under the Tamil Nadu Value Added Tax Act, making the Writ Petitions non-maintainable.

Upon review, the Court noted that the second respondent failed to provide the requested details for unreported purchases and mechanically accepted the audit report without independent assessment. The Court found that the principles of natural justice were indeed violated in passing the assessment orders. Consequently, the impugned assessment orders were quashed and remanded back to the second respondent for fresh consideration, emphasizing the need for affording the petitioner adequate opportunity to present objections and granting a personal hearing.

The Court directed the second respondent to furnish all documents relied upon during assessment proceedings to the petitioner. The Writ Petitions were disposed of with no costs, and connected miscellaneous petitions were closed, ensuring a fair and just process in accordance with the law.