2022 (2) TMI 404 - HC - VAT and Sales Tax

Service of notice - whether pre-revisional notices dated 18.08.2014 was served on the writ petitioner-dealer on 31.08.2014 as mentioned in the impugned orders? - HELD THAT - In the case on hand, obviously, the service going by the respondent records has been made under Rule 19(1)(a) of TNVAT Rules. If it is under Rule 19(1)(a), explanation to rule 19(1)(a) assumes significance. A perusal of the explanation would make it clear that the person, who delivers the notice should have made an endorsement and such endorsement will be proof for the purposes of Sub-rule (1)(a). In the instant case, there is no such endorsement in the extracts from the records which have been placed before this Court. The writ petitioner counsel emphatically submits that the pre-assessment notices were not served on writ petitioner and the signature there is not that of anyone concerned with the writ petitioner. This is a fit case to give the benefit of doubt to the writ petitioner-dealer. This means that it has not been conclusively established vide explanation to Rule 19(1)(a) of TNVAT Rules that the pre-revisional notices dated 18.08.2014 have been duly served on the writ petitioner-dealer on 31.08.2014. This further means that the impugned orders will have to be interfered with on this short point and the writ petitioner-dealer has to be given opportunity afresh to show cause. Impugned orders are set aside on the short point that it has not been conclusively established qua explanation to Rule 19(1)(a) of TNVAT Rules that pre-revisional notices have been served on the writ petitioner and therefore, there is infraction of the common proviso to Section 27(1) and 27(2) of TNVAT Act, which makes it statutorily imperative to give a reasonable opportunity to the writ petitioner-dealer to show cause against the impugned orders - writ petitions are disposed of.

Summary

Issues:
Assessment under TNVAT Act for multiple years, validity of pre-revisional notices, compliance with Rule 19 of TNVAT Rules, opportunity to show cause against orders.

Analysis:
The judgment pertains to four writ petitions challenging revisional orders under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) for different assessment years. The central issue revolves around the service of pre-revisional notices dated 18.08.2014 on the writ petitioner-dealer. The petitioner contended that no such notices were served, while the State Counsel argued otherwise, emphasizing compliance with Rule 19 of the Tamil Nadu Value Added Tax Rules, 2007 (TNVAT Rules). The court noted the absence of endorsement on the notices as per Rule 19(1)(a) and gave the benefit of doubt to the petitioner, ruling that the notices were not conclusively served. This finding led to the interference with the impugned orders, necessitating a fresh opportunity for the petitioner to show cause.

The court highlighted the statutory requirement of providing a reasonable opportunity to show cause against orders under Section 27 of the TNVAT Act. It clarified that such an opportunity does not mandate a personal hearing but necessitates a chance to present arguments. Referring to a previous case, the court differentiated between the requirements of personal hearing under different sections of the Act. Consequently, the impugned orders were set aside due to the lack of conclusive proof of notice service, triggering the need for the petitioner to respond to the assessment notices within a specified timeframe.

In the final directives, the court ordered the petitioner to furnish supporting documents in response to the notices and directed the Assessing Officer to conduct a legal review of the petitioner's submissions within a stipulated period. The judgment focused on procedural fairness, emphasizing the importance of adherence to statutory provisions regarding notice service and the right to be heard. By granting the petitioner a fresh opportunity to present their case, the court upheld principles of natural justice and procedural due process in tax assessment matters under the TNVAT Act.