High Court quashes assessment order citing lack of natural justice. Petitioner to get fresh assessment.

The Madras High Court set aside an assessment order due to a violation of natural justice principles. The court found that the petitioner was not given an opportunity to present objections before the order was passed, leading to a higher tax rate being imposed. The court directed the second respondent to reconsider the matter, emphasizing the importance of considering export documents and statutory forms. The court allowed the Writ Petition, remanding the matter for a fresh assessment with instructions to consider all relevant documents and provide the petitioner with a personal hearing. No costs were imposed on the parties.

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Issues: Violation of principles of natural justice in passing assessment order, refusal to consider export documents for exemption, applicability of Circular on acceptance of statutory forms

In this judgment by the Madras High Court, the petitioner, a registered dealer under the TNVAT Act and CST Act, challenged an assessment order dated 06.01.2015 passed by the first respondent and a subsequent demand dated 28.04.2016 issued by the second respondent. The petitioner shifted their place of business, leading to a change in the assessment circle to the jurisdiction of the second respondent. The impugned order related to the production of Form 'C' declaration and export documents for concessional tax rates and exemption. The petitioner sought revision under Section 55 of the Act due to the refusal to consider export documents, which led to a higher tax rate being imposed for transactions not covered by 'C' forms. The court noted that the assessment order was passed without giving the petitioner an opportunity to submit objections, violating principles of natural justice.

The court found that the impugned assessment order failed to comply with the principles of natural justice as the petitioner was not given a chance to present objections before the order was passed. While the first respondent accepted 'C' forms for certain transactions, they imposed a higher tax rate for transactions not covered by 'C' forms and disallowed exemption by not considering export documents. Consequently, the court set aside the assessment order dated 06.01.2015 due to the violation of natural justice and directed the second respondent to reconsider the matter. The court also highlighted a Circular issued by the Principal Commissioner regarding the acceptance of statutory forms, emphasizing that belated production of Form 'C' declarations should not be the sole ground for rejection. The court instructed the second respondent to consider the 'C' declarations, export documents, and transit sale documents provided by the petitioner during the fresh assessment.

Ultimately, the court allowed the Writ Petition, setting aside the impugned order and remanding the matter to the second respondent for a fresh assessment. The second respondent was directed to allow the petitioner a personal hearing and consider the Form 'C' declarations, export documents, and transit sale documents to redo the assessment in accordance with the law. The judgment concluded without imposing any costs on the parties involved.

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