2021 (10) TMI 1126 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy of appeal - Revisional/re-assessment orders - escapement of turnover - wrong availment of Input Tax Credit - reasonable opportunity to show cause provided or not - HELD THAT - This Court is clear in its mind that personal hearing is not statutorily imperative for a legal drill i.e., assessment of escaped turnover/wrong availment of 'Input Tax Credit' (ITC). This is owing to the language in which common proviso to sub-sections (1) and (2) of Section 27 of TNVAT Act is couched. The expression 'a reasonable opportunity to show cause against such order' occurring in the proviso has been explained by this Court in a detailed and elaborate order in STATE BANK OF INDIA OFFICER'S ASSOCIATION (CC) SBIOA VERSUS THE ASSISTANT COMMISSIONER (ST) 2019 (9) TMI 698 - MADRAS HIGH COURT . This Court is informed that this order has not been reported in any law journal. Therefore, this Court deems it appropriate to give case number and date of order for the benefit of all concerned. In the present case, there is no disputation or disagreement that the writ petitioner has been given an opportunity of personal hearing vide communication dated 11.02.2021, but the writ petitioner did not respond/avail the same. Therefore, the only grievance of the writ petitioner is, mismatch ought to have been examined by the Assessing Officer though the writ petitioner has not responded. However, learned Revenue counsel points out that it would have been examined if the dealer/writ petitioner had responded - There is no disputation or disagreement before this Court that alternate remedy against impugned orders is available to writ petitioner-dealer by way of statutory appeal under Section 51 of TNVAT Act. The campaign against impugned orders in writ jurisdiction in the captioned main writ petitions fail. However, it is made clear that it is open to the writ petitioner to avail alternate remedy under Section 51 of TNVAT Act, if the writ petitioner chooses to do so, subject to limitation and pre-deposit conditions set out therein, i.e., if the writ petitioner satisfies these conditions and takes alternate remedy route i.e., statutory appeal, the Appellate Authority shall deal with the appeals on its own merits and in accordance with law, uninfluenced by any of the observations made in this order. The sequitur that follows from the narrative discussion and dispositive reasoning set out thus far is captioned writ petitions fail and the same deserve to be dismissed albeit preserving the rights of the writ petitioner to pursue alternate remedy subject to pre-deposit and limitation conditions - Petition dismissed.

Summary

Issues Involved:
1. Validity of revisional/re-assessment orders under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).
2. Compliance with previous court directions regarding mismatch cases.
3. Opportunity for personal hearing.
4. Availability and appropriateness of alternate remedy under Section 51 of the TNVAT Act.

Detailed Analysis:

1. Validity of Revisional/Re-assessment Orders under Section 27 of TNVAT Act:
The six writ petitions challenge the revisional/re-assessment orders dated 21.04.2021 under Section 27 of the TNVAT Act for different assessment years. The petitioner contended that the orders were not in accordance with the directions given by the court in a previous common order dated 15.03.2018. The court noted that the impugned orders were indeed made under Section 27 of the TNVAT Act, and there was no disputation regarding the provision of law under which these orders were made.

2. Compliance with Previous Court Directions Regarding Mismatch Cases:
The petitioner argued that the impugned orders did not comply with the directions given in the previous common order, particularly regarding the mismatch issue. The petitioner claimed that if the dealer at the far end had not paid the tax, the petitioner should not be penalized. The court acknowledged this argument but highlighted that the petitioner did not respond to the personal hearing notice, which was crucial for examining the mismatch issue.

3. Opportunity for Personal Hearing:
The court observed that personal hearing is not statutorily imperative for assessment of escaped turnover or wrong availment of Input Tax Credit (ITC) under Section 27 of the TNVAT Act. However, in this case, the respondent had offered a personal hearing via a communication dated 11.02.2021, which the petitioner failed to attend. The court emphasized that the petitioner’s non-response to the personal hearing notice weakened their position.

4. Availability and Appropriateness of Alternate Remedy under Section 51 of the TNVAT Act:
The court stressed the availability of an alternate remedy by way of a statutory appeal under Section 51 of the TNVAT Act. It was noted that the impugned orders themselves mentioned this appeal remedy. The court referred to several precedents, including the Dunlop India case, Satyawati Tandon case, and K.C. Mathew case, to underline that the alternate remedy rule should be applied rigorously in fiscal statutes. The court concluded that the petitioner should pursue the alternate remedy, as the case did not fall under any exceptions that would justify bypassing this statutory procedure.

Conclusion:
The court dismissed the writ petitions, preserving the petitioner’s right to pursue the alternate remedy under Section 51 of the TNVAT Act, subject to pre-deposit and limitation conditions. The court made it clear that the Appellate Authority should deal with the appeals on their own merits, uninfluenced by any observations made in this order. Consequently, the connected writ miscellaneous petitions were also dismissed, with no order as to costs.