2022 (2) TMI 448 - HC - VAT and Sales Tax

Validity of assessment order - violation of principles of natural justice - petitioner claimed input tax credit belatedly - HELD THAT - Earlier Notices were issued on 10.02.2010 and fresh Notices were also issued on 14.07.2014. After the petitioner was issued with fresh Notices, the petitioner also replied to the same and field additional written submission. The fact remains that a personal hearing was held by an officer earlier. The impugned Assessment Orders have been passed by another officer long after the aforesaid personal hearing by another officer. Since it is not possible to go into disputed questions of facts in these Writ Petitions as to the correctness or otherwise the claim of the petitioner, the impugned Assessment Orders are liable to be passed. Since the impugned Assessment Orders have been passed without following principles of natural justice, the impugned Assessment Orders are quashed and the cases are remitted back to the respondent to pass fresh orders - Petition allowed by way of remand.

Summary

Issues:
Challenge to Assessment Orders based on principles of natural justice.

Analysis:
The petitioner challenged three Assessment Orders passed by the respondent, primarily alleging a lack of adherence to principles of natural justice. The petitioner had previously received pre-assessment notices proposing to disallow input tax credit under the TNVAT Act, 2006 for belated claims. These notices were challenged in court but ultimately dismissed. Subsequently, the petitioner filed objections to the notices, following which fresh notices were issued for the assessment years in question, including proposals for penalties. The petitioner responded to these fresh notices and requested time for submission of documents and dropping of penalty proposals. Despite these actions, the impugned Assessment Orders were passed in 2021 by a different officer than the one who conducted the personal hearing, leading to the challenge on grounds of procedural fairness.

The petitioner argued that the delayed issuance of the Assessment Orders by a different officer post personal hearing warranted quashing of the orders due to the violation of principles of natural justice. On the other hand, the respondent contended that the petitioner had alternative remedies available and was not entitled to input tax credit due to failure to claim it in a timely manner. The respondent further argued that remitting the case back for fresh assessment would serve no useful purpose. After hearing both parties and examining the relevant documents, the court noted the discrepancy in the timing of the Assessment Orders vis-a-vis the personal hearing and concluded that the orders were passed without following principles of natural justice.

In light of the procedural irregularities and the failure to adhere to natural justice principles, the court quashed the impugned Assessment Orders and remitted the cases back to the respondent for fresh orders. The petitioner was granted the liberty to submit additional representations within thirty days, and the respondent was directed to conduct a personal hearing and issue fresh orders within sixty days from the date of the court's order. The judgment disposed of the Writ Petitions with these directions, emphasizing no costs to be awarded and closing the connected Miscellaneous Petitions.