2014 (10) TMI 869 - HC - VAT and Sales Tax

Court sets aside assessment orders under Tamil Nadu VAT Act 2006, emphasizes fairness in procedure

M/s. SRC Projects (P) Ltd. Versus The Assistant Commissioner (CT) and The Joint Commissioner (CT) Salem

The court set aside the assessment orders under the Tamil Nadu Value Added Tax Act, 2006, due to the denial of a personal hearing, deeming the orders ... Principle of natural justice - reversal of ITC availed by the petitioner - petitioner was not afforded an opportunity of personal hearing. - Held that:- the observation made by the first respondent rejecting the request for personal hearing, that too while finalizing the revision assessment is all the more arbitrary and unreasonable. Hence, the impugned orders are liable to be set aside. Accordingly, these writ petitions are allowed and the impugned orders are set aside and the matters are remanded to the first respondent for fresh consideration. Issues:Challenging assessment orders under Tamil Nadu Value Added Tax Act, 2006 based on denial of opportunity of personal hearing.Analysis:The petitioner challenged assessment orders under the Tamil Nadu Value Added Tax Act, 2006, which reversed Input Tax Credit (ITC) availed by the petitioner. The primary ground for challenging the orders was the denial of an opportunity for a personal hearing. The petitioner had submitted a detailed objection, seeking a personal hearing, but the first respondent erroneously rejected the request, stating that it would not add any new contentions beyond what was already raised. However, the court found this reasoning to be arbitrary and unreasonable, citing a previous Division Bench judgment that emphasized the importance of affording a personal hearing before revising assessments. The court also highlighted a circular binding on the respondent, emphasizing the need for fairness in procedure, especially when a specific demand for a personal hearing is made. Consequently, the court deemed the impugned orders as perverse and set them aside, remanding the matters for fresh consideration with a directive to provide a personal hearing to the petitioner.The court emphasized that the Assessing Officer must independently reconsider the objections filed by the petitioner without being influenced by the previously quashed orders. It directed the Assessing Officer to carefully evaluate the definitions of 'manufacture' and 'capital goods' under the Tamil Nadu Value Added Tax Act, 2006, before passing a reasoned order in accordance with the law. The judgment concluded by stating that no costs were awarded, and connected miscellaneous petitions were closed.