Best judgment assessment vitiated by denial of hearing and cross-examination rights under the Tamil Nadu VAT framework.

A best judgment assessment under section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 cannot stand where the dealer is denied a reasonable opportunity of hearing and the statutory safeguard under section 81 is not effectively followed. The High Court noted that the assessing authority's order contained inconsistent statements about objections and documents, showing non-application of mind. Because adverse materials were relied upon, the dealer was entitled to summon and cross-examine the relevant persons. The assessment was set aside and the matter remitted for fresh consideration after granting hearing and compliance with section 81.

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Issues: Whether an assessment order passed under section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained when the dealer was not granted a personal hearing and was denied the opportunity to summon and cross-examine persons whose statements or materials were relied upon.

Analysis: The assessment was made on the footing that the dealer had failed to file proper return or supporting documents. The authority's own order contained inconsistent statements as to whether objections had been filed and whether documents were produced, which indicated non-application of mind. More importantly, where best judgment assessment is made under section 22(4), the proviso requires a reasonable opportunity of being heard. Section 81 further empowers the assessing authority to summon witnesses and compel production of documents, and the dealer is entitled to have that procedural safeguard effectively followed where adverse materials are relied on. The requirement of enquiry and hearing is therefore not a formality, but an integral part of the assessment process.

Conclusion: The impugned assessment order could not be sustained and was set aside. The matter was remitted for fresh consideration after granting the petitioner an opportunity of hearing and compliance with section 81 of the Tamil Nadu Value Added Tax Act, 2006.

Ratio Decidendi: In a best judgment assessment under section 22(4) of the Tamil Nadu Value Added Tax Act, 2006, denial of a reasonable opportunity of hearing and denial of the statutory opportunity to summon and cross-examine material witnesses vitiates the assessment.

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