2021 (9) TMI 1039 - HC - VAT and Sales Tax

Validity of deemed assessment order - five adjournments in as many listings in the span of over 2 years were made - HELD THAT - A careful perusal of the impugned orders bring to light that the impugned orders, after setting out the deemed assessment under Section 22(2) of TNVAT Act, go to show that the business place of writ petitioner was inspected by Enforcement Officers on certain dates and they noticed certain defects. The defects noticed by Enforcement Officers have been adumbrated. After adumbration of defects noticed by the Enforcement Officers, the impugned order merely says that the turnover declared by the writ petitioner is incorrect and simply puts in place the proposed revision i.e, the revision proposed by the Enforcement Wing. Thereafter, the impugned order also makes an equal time addition by way of penalty under Section 27(3) of TNVAT Act. The impugned orders are set aside solely for the prupose of enabling the respondent to redo the revisional assessment by following Narasus principle i.e, independent application of mind by the respondent qua the proposal given by the Enforcement Wing, in other words, without blindly and mechanically accepting the revised proposal made by the Enforcement Wing - before redoing the assessment, it is open to the respondent to call for documents in support of writ petitioner's request in response to the pre-revisional assessment notice. Petition disposed off.

Summary

Issues involved:
1. Delay in disposal of writ petitions.
2. Application of Narasus principle in assessment under TNVAT Act.
3. Requirement of personal hearing in proceedings under Section 27 of TNVAT Act.

Analysis:
1. Delay in disposal of writ petitions:
The judgment addresses the significant delay in disposing of the four writ petitions, which were filed over 2 years and 8 months ago. The counsel for the petitioner had taken multiple adjournments due to health reasons. The court noted that while adjournments on health grounds are acceptable, alternative arrangements could have been made to avoid such delays. The court proceeded with the matter, emphasizing the need to prevent such occurrences in the future.

2. Application of Narasus principle in assessment under TNVAT Act:
The writ petitions challenged orders made under the TNVAT Act, specifically under Section 27 post deemed assessment under Section 22(2). The counsel for the petitioner argued for the application of the Narasus principle, which requires the Assessing Officer to independently analyze the assessment without solely relying on proposals from Enforcement Authorities. The court agreed with this argument, highlighting that the respondent had not conducted an independent analysis but merely accepted the revised proposal from the Enforcement Wing.

3. Requirement of personal hearing in proceedings under Section 27 of TNVAT Act:
The counsel for the petitioner contended that a personal hearing was necessary to present supporting documents, but the court clarified that personal hearings are not mandatory for proceedings under Section 27 of the TNVAT Act. Citing previous judgments, the court emphasized that the discretion to grant a personal hearing lies with the respondent. However, the court upheld the argument based on the Narasus principle, emphasizing the need for an independent assessment.

In conclusion, the court set aside the impugned orders to enable the respondent to redo the revisional assessment in accordance with the Narasus principle. The respondent was directed to conduct a denovo exercise, independently analyzing the material and calling for supporting documents as necessary. The court specified a timeline for the completion of the reassessment and instructed the respondent to serve the revised assessment orders on the petitioner. The writ petitions were disposed of with these directives, and no costs were awarded.