2021 (11) TMI 296 - HC - VAT and Sales Tax

Principles of natural justice - refund claim - applicability of sub-rule (2) of Rule 11 of TNVAT Rules - HELD THAT - A careful perusal of the impugned orders reveals that it does not mention that personal hearing was granted. To be noted, 03.09.2021 notices were served on the writ petitioner / dealer on 04.09.2021, excluding 04.09.2021, 7 days elapsed on 11.09.2021 and the impugned orders have been made one working day later on 13.09.2021. Therefore, the likelihood of personal hearing if at all could have been only on 12.09.2021, but the law is well settled that an impugned order cannot be improved by filing a counter affidavit. There is no difficulty in accepting the submission of learned Revenue counsel that it is not statutorily imperative to grant personal hearing with regard to refund applications under Section 18 (3) read with Rule 11 (2) of TNVAT Act under TNVAT Rules respectively. However, in this case, the respondent has chosen to grant a personal hearing to the writ petitioner at his discretion. Therefore, this Court is of the view that it is only appropriate that the writ petitioner is granted the opportunity of personal hearing. The language of sub-Rule (2) of Rule 11 of TNVAT Rules is clear that an applicant qua refund should annex the invoices or bills related to purchases along with this refund application and personal hearing is not statutorily imperative and therefore this order will not serve as a precedent in these aspects of the matter. In the case on hand, the respondent has chosen to call upon the refund applicant to produce documents and has also chosen to give an opportunity of personal hearing and therefore, this order is being passed. Impugned orders are set aside solely on the ground that personal hearing has not been granted to writ petitioner though pre-impugned order notices offer one to the writ petitioner and the writ petitioner could have produced the documents sought for though pre-impugned notices give such an opportunity - Petition disposed off.

Summary

Issues Involved:
Challenge to disallowance of refund claimed by the writ petitioner/dealer based on five different orders dated 13.09.2021 for the months of May 2013, June 2013, July 2013, August 2013, and September 2013. The main issues include the lack of personal hearing, failure to produce required documents, and the statutory requirements for refund applications under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:

1. Lack of Personal Hearing:
The impugned orders disallowing the refund did not mention the grant of a personal hearing, despite the respondent's notice indicating the possibility of one. The court noted that the respondent had discretion to grant a personal hearing, and in this case, it was appropriate to allow the writ petitioner the opportunity for a personal hearing. The court emphasized that while personal hearing is not statutorily imperative for refund applications, the respondent had chosen to grant one, necessitating a fair opportunity for the writ petitioner.

2. Failure to Produce Documents:
The respondent argued that the writ petitioner did not respond to the notices requesting certain documents. While the rules mandate filing invoices and bills related to purchases with the refund application, the court acknowledged that the respondent had asked the writ petitioner to produce these documents. Consequently, the court directed the writ petitioner to produce the required documents and granted a personal hearing for further consideration.

3. Statutory Requirements for Refund Applications:
The court clarified that while Rule 11(2) of the TNVAT Rules requires applicants to annex invoices or bills related to purchases with the refund application, personal hearing is not a statutory requirement. However, in this case, the respondent voluntarily called for the documents and provided a personal hearing. The court emphasized that this specific order should not be considered a precedent regarding the statutory requirements, as the respondent had deviated from the standard procedure.

Conclusion:
The court set aside the five impugned orders disallowing the refund solely due to the lack of a granted personal hearing. A new personal hearing was scheduled for the writ petitioner to present the required documents. The respondent was directed to re-evaluate the refund applications promptly and conclude the process within three weeks. The court disposed of the writ petitions with the aforementioned directives, emphasizing that there would be no costs associated with the judgment.