2023 (9) TMI 636 - HC - VAT and Sales Tax

Compounding assessment under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006 - opportunity of hearing not provided - violation of principles od natural justice - HELD THAT - The fact remains that the Assessing Authority passed the assessment order without hearing the appellant. It may be true that the appellant also to be blamed for his failure to submit the documents and appear before the Assessing Authority within fifteen days. The appellant, in his representation, dated 10.07.2021, has requested time for collection of evidence and to submit documents. As per the earlier direction of this Court, the appellant was asked to appear before the Assessing Authority on a particular date. It is for the Assessing Authority to fix a date for hearing. If the communication is received immediately on the expiry of fifteen days time asked for by the appellant, he would only expect the second respondent to fix a date for hearing, so that he would be in a position to appear before the Assessing Authority and produce the documents to substantiate his case. Only in the said circumstances, the assessment order impugned in the writ petition cannot be sustained merely because it was passed fifteen days after the expiry of the time asked for by the appellant. The appellant cannot be punished for expecting a notice fixing a date for hearing. This Court finds that the assessment order impugned in the writ petition is in violation of the principles of natural justice and finds merits in the writ petition - petition allowed.

Summary

Issues Involved:
The judgment involves issues related to compounding assessment under Section 3(4) of the Tamil Nadu Value Added Tax Act, 2006, violation of principles of natural justice in assessment orders, alternative appeal remedy before the Appellate Commissioner, and the right to fair opportunity for the appellant.

Compounding Assessment and Violation of Principles of Natural Justice:
The appellant, a registered dealer, sought compounding assessment under the Act due to a turnover below Rs. 50 Lakhs. The Assessing Authority passed an assessment order without a proper hearing, leading to a challenge through writ petitions. The High Court found the original assessment order to be in violation of natural justice principles as the appellant was not given a fair opportunity to present evidence. The Court set aside the order and directed the Assessing Authority to conduct a fresh assessment after providing the appellant with another opportunity to be heard.

Alternative Appeal Remedy and Failure to Challenge Order:
The learned Single Judge noted that the appellant had an alternative remedy to appeal before the Appellate Commissioner but failed to do so within the specified time frame. The Judge found that the appellant did not challenge the original assessment order promptly, leading to the dismissal of the writ petition initially. However, the Court acknowledged that the Assessing Authority's actions were also at fault for not providing a proper hearing to the appellant.

Direction for Fresh Assessment and Opportunity for Appellant:
In the final judgment, the High Court allowed the writ appeal, setting aside the Single Judge's order and the original assessment order. The Assessing Authority was directed to fix a new hearing date for the appellant without requiring any extension of time. The appellant was instructed to appear before the Authority with submissions and documents, and the Authority was mandated to pass new orders within four weeks from the first hearing. No costs were awarded in the case, and the connected miscellaneous petition was closed.