2024 (3) TMI 790 - HC - VAT / Sales Tax

Violation of principles of natural justice or not - petitioner failed to respond to the show cause notice or avail of an opportunity of personal hearing - Validity of assessment order - HELD THAT - The documents on record include the show cause notice dated 23.02.2023. The said notice offered a personal hearing to the petitioner. Therefore, the respondents cannot be faulted for the petitioner failing to avail of such opportunity. At the same time, it is noticeable that the impugned order does not make reference to the earlier reply issued by the petitioner in February 2020. It is also noticeable that a sum of Rs. 4,55,013.70 was appropriated from the petitioner's bank account in the Punjab National Bank as against the total amount due of Rs. 4,52,341/- under the impugned assessment order. Therefore, at this juncture, revenue interest is fully secured. In these circumstances, the impugned order calls for interference solely with a view to provide an opportunity to the petitioner. The impugned assessment order is quashed and the matter is remanded for reconsideration. The petitioner is permitted to submit a reply to the show cause notice dated 23.02.2023 within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.

Summary

Issues involved:
The challenge to an assessment order regarding transition of purchase tax to GST regime and failure to reference petitioner's reply in the assessment order.

Issue 1 - Transition of Purchase Tax to GST Regime:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged an assessment order claiming that a sum of Rs. 1,33,123/- paid as purchase tax was eligible for transition to the GST regime under Section 140 of applicable GST statutes. The petitioner received a show cause notice in February 2020 and responded stating the eligibility for transitional credit. However, the impugned assessment order did not reference the petitioner's reply and the explanation provided therein. The entire demand of Rs. 4,52,341/-, including tax, interest, and penalty, was recovered from the petitioner's bank account.

Issue 2 - Failure to Reference Petitioner's Reply in Assessment Order:
The Additional Government Pleader pointed out that the petitioner failed to respond to the show cause notice or avail of a personal hearing, leading to the issuance of the impugned order. The show cause notice dated 23.02.2023 offered a personal hearing to the petitioner, but the impugned order did not mention the petitioner's earlier reply from February 2020. Despite the recovery of Rs. 4,55,013.70 from the petitioner's bank account, more than the total amount due under the assessment order, revenue interest was fully secured. The court found that the impugned order needed interference to provide an opportunity to the petitioner.

Judgment:
The court quashed the impugned assessment order and remanded the matter for reconsideration. The petitioner was allowed to submit a reply to the show cause notice within two weeks. The assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within two months of receiving the reply. The amount appropriated from the petitioner's bank account was to be retained pending the outcome of the remanded proceedings. The writ petition was disposed of with no order as to costs.