2015 (9) TMI 526 - HC - VAT and Sales Tax

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

M. Sahul Hameed Versus The Commissioner of Commercial Taxes, The Deputy Commercial Tax Officer

The court found that the assessment order passed without affording the petitioner a personal hearing violated the principles of natural justice under ... Violation of Principle of natural Justice – Non Supply of Invoices – Incorrect and Incomplete exemption claim – Second respondent issued notice, alleging that exemption claimed by petitioner was incorrect and incomplete, thereafter passed impugned assessment order, confirming proposal in notice – It was alleged that respondent did not furnish copies of documents sought for by petitioner and without giving any opportunity of personal hearing to petitioner, impugned order was passed violating principles of natural justice – Held that:- perusal of impugned order would clearly reveal that no such opportunity of personal hearing was given to petitioner while passing impugned order – No doubt, Section 22(4) of TNVAT Act, 2006, contemplates reasonable opportunity of being heard to dealer before taking any action and in absence, it would cause great prejudice to assesse as there was violation of principles of natural justice – Since it was mandatory to provide copies of certain invoices, same cannot be denied to petitioner and on that score alone, impugned assessment order warrants interference – Impugned proceedings of respondent quashed – Respondent directed to furnish copies to petition – Decided in favour of Assesse. 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.