Limitation and personal hearing in VAT reassessment led to conditional remand for fresh consideration

The Madras High Court noted that reopening for assessment year 2011-12 was governed by the amended Section 27 of the Tamil Nadu Value Added Tax Act, 2006, extending the limitation period to six years, so the limitation objection failed. It also found that the assessment disputes involved factual controversies not suitable for writ adjudication and that no personal hearing had been afforded before the orders were passed. The assessments were therefore set aside conditionally and remanded for fresh consideration, subject to the petitioner depositing 25% of the demand and filing a reply within the stipulated time.

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Issues: (i) Whether the reopening of assessment for the assessment year 2011-12 was barred by limitation under Section 27 of the Tamil Nadu Value Added Tax Act, 2006; (ii) whether the assessment orders could be sustained despite absence of personal hearing and the existence of disputed questions of fact, or whether the matters required remand for reconsideration.

Issue (i): Whether the reopening of assessment for the assessment year 2011-12 was barred by limitation under Section 27 of the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The amended provision extending the reopening period to six years governed the matter, and the assessment year in question fell within that regime. The challenge based on expiry of limitation was therefore unsustainable.

Conclusion: The reopening for the assessment year 2011-12 was held to be within limitation and the objection was rejected.

Issue (ii): Whether the assessment orders could be sustained despite absence of personal hearing and the existence of disputed questions of fact, or whether the matters required remand for reconsideration.

Analysis: The petitioner did not file a reply within the time granted to the notices, and the merits raised factual disputes not capable of adjudication on the writ record alone. At the same time, no personal hearing had been afforded before passing the orders, and the Court considered it appropriate to permit reconsideration on payment of a part of the demand.

Conclusion: The assessment orders were set aside conditionally and the matters were remitted for reconsideration on the petitioner depositing 25% of the demand and filing a reply within the stipulated time.

Final Conclusion: The writ petitions were not finally decided on merits; the tax assessments were kept open for fresh consideration subject to compliance with the deposit condition, and the petitioner obtained only partial relief.

Ratio Decidendi: In tax assessment writs, limitation objections must yield to the applicable statutory amendment, while disputes involving factual controversy and absence of personal hearing may justify conditional remand rather than merits adjudication.

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