High Court mandates fresh enquiry with personal hearing, stresses due process under tax law.

The High Court set aside the respondent's order and directed a fresh enquiry with the opportunity for a personal hearing as requested by the petitioner. Emphasizing the importance of due process under section 81 of the Tamil Nadu Value Added Tax Act, the Court highlighted the right to cross-examine individuals and the necessity of following statutory provisions. The authority was instructed to conduct proceedings promptly and finalize orders within four months, with the option of day-to-day hearings if required. The writ petition was disposed of without costs, and the related miscellaneous petition was closed.

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Issues:
Challenge to order of respondent dated January 12, 2015 and direction for fresh orders after grant of enquiry and opportunity as requested by the petitioner.

Analysis:
The petitioner challenged the respondent's order dated January 12, 2015, seeking a direction to pass fresh orders after granting an enquiry and opportunity as requested in representations dated February 5, 2014, and February 17, 2014. The petitioner contended that the respondent assessed them under section 22(4) of the Tamil Nadu Value Added Tax Act, 2006, due to an alleged contravention of section 21 of the Act, which mandates filing returns by registered dealers. The petitioner requested examination of four individuals mentioned in a notice to the Assistant Commissioner. However, the impugned order indicated discrepancies in the authority's statements, highlighting a lack of proper consideration and non-application of mind.

The High Court emphasized the necessity of conducting an enquiry or providing a personal hearing, especially when proceeding against a party under section 22 of the 2006 Act. Referring to section 81 of the Act, the Court underscored the right to cross-examine individuals, stressing the importance of following due process. Citing a previous case under the Tamil Nadu General Sales Tax Act, the Court reiterated the entitlement of aggrieved parties to cross-examine witnesses, emphasizing the authority's duty to issue summons as per statutory provisions.

Furthermore, the Court clarified that under section 81 of the 2006 Act, the authority must summon individuals and allow the dealer to cross-examine them to ensure a fair determination of tax liability. Consequently, the Court set aside the impugned order and directed the authority to adhere to section 81 of the Act, emphasizing the mandatory nature of providing an opportunity for hearing before passing final orders. The respondent was instructed to finalize the orders within four months, with a provision for conducting proceedings on a day-to-day basis if necessary. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.

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