Natural justice in reassessment disputes: High Court set aside an order reversing input tax credit and remitted the matter for reconsideration.

The reassessment of input tax credit reversal and penalty was challenged for want of enquiry and breach of natural justice. The High Court noted that the order had been passed without the enquiry contemplated under section 27(2) of the Tamil Nadu Value Added Tax Act, 2006, and the record did not establish suppression of assessable turnover. As the petitioner was willing to produce documents relevant to correct quantification of tax liability, the matter required fresh consideration. The impugned order was set aside and the case was remitted for reconsideration after allowing the petitioner to file documents and after granting a hearing.

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Issues: Whether the reassessment order reversing input tax credit and levying penalty was liable to be set aside for want of enquiry and violation of natural justice, and whether the matter should be reconsidered after permitting the petitioner to produce documents.

Analysis: The petitioner pointed out apparent errors in the computation of input tax credit reversal and sought rectification, but the request was rejected. The order under challenge was passed without conducting the enquiry contemplated under section 27(2) of the Tamil Nadu Value Added Tax Act, 2006, and the record did not establish suppression of assessable turnover. As the petitioner was willing to produce documents relevant to the correct quantification of tax liability, the dispute required fresh consideration with due opportunity.

Conclusion: The impugned order was set aside and the matter was remitted to the respondent for fresh consideration after affording the petitioner an opportunity to file documents and after granting due opportunity of hearing.

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