Natural justice in tax assessment: denial of personal hearing and rejection of belated declaration forms can vitiate reassessment.

A dealer's request for personal hearing in pre-revision proceedings had to be considered before finalising assessment; failure to do so offended natural justice and invalidated the assessment orders. The court also noted that C Forms, F Forms and similar declaration forms supporting concessional taxation could not be rejected merely because they were produced after the stipulated period. Where the dealer was not shown to be a chronic defaulter and the available forms were capable of consideration, they had to be examined on remand. The impugned assessments were set aside and fresh assessment was directed after granting personal hearing and considering the declaration forms.

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Issues: (i) Whether the assessment orders were vitiated for failure to consider the dealer's representation and request for personal hearing; (ii) Whether C Forms, F Forms and other declaration forms could be accepted when produced beyond the stipulated period.

Issue (i): Whether the assessment orders were vitiated for failure to consider the dealer's representation and request for personal hearing.

Analysis: The dealer had specifically sought personal hearing in the representation filed after the pre-revision notice. A request for personal hearing ought to be considered and granted before finalising the assessment, irrespective of whether the revision was stated to be under Section 22(4) or Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006. Non-consideration of that request offended the principles of natural justice.

Conclusion: The assessment orders were invalid for violation of principles of natural justice.

Issue (ii): Whether C Forms, F Forms and other declaration forms could be accepted when produced beyond the stipulated period.

Analysis: Declaration forms are meant to enable concessional taxation and their non-production within a fixed time cannot automatically bar acceptance when subsequently produced. The departmental circular recognised acceptance of such forms based on the conduct of the dealer, and the record did not show that the dealer was a chronic defaulter. The forms available with the dealer were therefore liable to be considered on remand.

Conclusion: The declaration forms could not be rejected merely for delayed production and had to be taken into account.

Final Conclusion: The impugned assessments were set aside and the matters were remitted for fresh assessment after accepting the available declaration forms and granting personal hearing.

Ratio Decidendi: When a dealer specifically requests personal hearing in assessment proceedings, denial of that opportunity vitiates the assessment for breach of natural justice, and declaration forms supporting concessional tax cannot be refused solely on the ground of delayed production absent adverse findings on the dealer's conduct.

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