Court quashes assessment order violating natural justice, grants petitioner personal hearing

The court found that the assessment order passed without affording the petitioner a personal hearing violated the principles of natural justice under Section 22(4) of the TNVAT Act, 2006. The failure to provide necessary documents and a reasonable opportunity to be heard prejudiced the petitioner. Consequently, the court allowed the writ petition, quashed the proceedings, directed the petitioner to apply for documents, and ordered the second respondent to provide them promptly. The petitioner was granted time to file objections, and a personal hearing was mandated before passing any orders, with no costs imposed.

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Issues:
Violation of principles of natural justice in assessment proceedings.

Analysis:
The petitioner, a business proprietor, challenged an assessment order passed by the second respondent under the TNVAT Act, 2006, alleging that the exemption claimed was incorrect and incomplete. The petitioner contended that he was not provided with necessary particulars and documents before the assessment. The petitioner sought an opportunity of personal hearing, claiming a violation of principles of natural justice. The respondent argued that the petitioner failed to submit a reply with supporting documents despite receiving a pre-revision notice. The court noted that the impugned order was passed without affording the petitioner a personal hearing, contrary to the requirements of Section 22(4) of the TNVAT Act, 2006.

The court found that the second respondent issued a pre-revision notice proposing to reject the petitioner's returns and levy penalties without providing the necessary documents to the petitioner. The failure to give a reasonable opportunity of being heard before taking action under Section 22(4) of the TNVAT Act, 2006, was deemed to cause prejudice to the petitioner due to a violation of principles of natural justice. The court emphasized that the mandatory provision of providing copies of certain invoices forming the basis of the notice was essential and could not be denied to the petitioner. Consequently, the court held that the impugned assessment order was flawed and warranted interference.

In the final judgment, the court allowed the writ petition, quashed the impugned proceedings, and directed the petitioner to apply for the necessary documents within a week. The second respondent was instructed to provide the copies within a week of receiving the application. The petitioner was given two weeks to file detailed objections after receiving the documents. The second respondent was directed to conduct a personal hearing for the petitioner and pass appropriate orders within two weeks after completing all formalities. The court closed the connected miscellaneous petition without imposing any costs.

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