Proper show cause notice is mandatory before TNVAT reassessment; a mere document requisition cannot support the order.

A reassessment under the TNVAT Act cannot be sustained unless the dealer is first served with a proper show cause notice under Section 27(2) setting out the tentative basis of the proposed action. A communication that merely seeks documents and particulars functions only as an enquiry for production of accounts under Section 63(1) and does not satisfy the statutory requirement of notice. Even if a personal hearing is given, it cannot cure the absence of a valid show cause notice. On that basis, the reassessment order was set aside and the matter was remitted for fresh action after due notice and hearing.

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Issues: Whether the communication dated 12.12.2017 constituted a valid show cause notice under Section 27(2) of the TNVAT Act, 2006, and whether the consequential reassessment order could be sustained.

Analysis: The notice called upon the dealer to furnish documents and particulars, which was consistent with an enquiry for production of accounts and records under Section 63(1) of the TNVAT Act, 2006. It did not set out any tentative conclusion or proposed demand in the manner required for a show cause notice under Section 27(2). A personal hearing, even if afforded, could not cure the absence of a proper show cause notice. Since the reassessment was founded on a notice that did not satisfy the statutory requirement, the impugned order suffered from a fundamental procedural defect. The discrepancy between the tax proposed and the tax ultimately levied also reinforced the infirmity in the proceedings.

Conclusion: The impugned reassessment order was unsustainable and was set aside. The matter was remitted for issuance of a proper show cause notice and fresh consideration in accordance with law.

Final Conclusion: The assessee succeeded because the reassessment was invalid for want of a proper statutory notice, and the authority was directed to proceed afresh after due notice and hearing.

Ratio Decidendi: A reassessment under Section 27 of the TNVAT Act, 2006 cannot be sustained unless the dealer is first served with a proper show cause notice setting out the tentative basis of the proposed action; a mere requisition for documents under Section 63 does not satisfy that requirement.

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