Personal hearing required before VAT penalty order where turnover mismatch and alleged excess purchase reporting are disputed.

Assessment orders imposing penalties under the Tamil Nadu Value Added Tax Act should not be finalised without giving the assessee a personal hearing and a reasonable chance to explain alleged purchase and sales mismatches. The Court noted that the dispute involved factual appreciation of turnover differences and tax liability, and held that the Assessing Officer ought to have heard the assessee before passing the final order, especially where penalties were levied. As no such opportunity was provided, the matter was sent back for reconsideration after hearing the assessee, with directions to issue a fresh order.

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Issues: Whether the assessment order levying penalties under Section 27(3)(c) and Section 27(4)(2) of the Tamil Nadu Value Added Tax Act, 2006 could be sustained without affording the assessee a personal hearing and reasonable opportunity to explain the mismatch and alleged excess reporting of purchase turnover.

Analysis: The impugned order involved factual appreciation regarding purchase and sales mismatch and the alleged tax liability. The Court held that, in such circumstances, the Assessing Officer ought to have granted a personal hearing before passing the final order, particularly when penalties were also levied. Since that opportunity was not provided, the matter required reconsideration after hearing the assessee.

Conclusion: The writ petition was disposed of by directing the respondents to grant a personal hearing to the assessee within two weeks and then pass a fresh final order.

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