2017 (3) TMI 1111 - HC - VAT and Sales Tax

Court sets aside assessment orders for 2007-14 citing lack of natural justice, remits for fresh assessment.

The Court allowed the writ petitions, setting aside the assessment orders for the years 2007-08 to 2013-14 due to a violation of natural justice as the ... Principles of natural justice - opportunity of personal hearing - administrative circular requiring personal hearing - setting aside assessment and remand for fresh considerationPrinciples of natural justice - opportunity of personal hearing - Whether the petitioner was afforded the opportunity of personal hearing before passing the impugned assessment orders and whether non affordance amounted to violation of natural justice. - HELD THAT: - The pre assessment and revised notices called for objections within fifteen days and stated that the petitioner would be afforded a personal hearing if desired. The petitioner filed objections within the stipulated time. No subsequent notice was issued fixing a date for personal hearing. The departmental Circular No.7/2014 emphasises that a personal hearing shall be intimated and afforded to the dealer irrespective of whether the dealer has opted for it. Applying that Circular and the factual finding that no date was intimated, the Court concluded that the respondent did not in fact afford the petitioner the stated opportunity of personal hearing and that the assessment orders therefore suffer from a breach of the principles of natural justice. [Paras 8, 9, 10]Findings of assessment set aside on the ground that the petitioner was not afforded the personal hearing promised in the notices, constituting violation of principles of natural justice.Administrative circular requiring personal hearing - setting aside assessment and remand for fresh consideration - Remedial consequence to be adopted and directions for further proceedings after finding violation of natural justice. - HELD THAT: - Having found a breach of natural justice, the Court refrained from adjudicating the merits of the assessments. The impugned assessment orders were set aside and the matter was remitted to the respondent to pass fresh assessment orders after affording the petitioner an indicated date for personal hearing. The respondent was directed to hear the petitioner, consider all aspects and pass fresh orders on merits and in accordance with law within eight weeks from receipt of the Court's order. [Paras 11]Assessment orders quashed and matter remitted for fresh assessment after giving an explicit personal hearing; fresh orders to be passed within eight weeks.Final Conclusion: Writ petitions allowed: impugned assessment orders for assessment years 2007-08 to 2013-14 set aside for breach of natural justice for failure to afford the promised personal hearing; matter remitted for fresh assessment after affording an indicated personal hearing, with fresh orders to be passed within eight weeks. Issues:Challenge to assessment orders for assessment years 2007-08 to 2013-14 based on lack of opportunity for personal hearing and violation of principles of natural justice.Analysis:The petitioner, a registered dealer under Tamil Nadu Value Added Tax Act and Central Sales Tax Act, challenged assessment orders for various years, alleging that the respondent did not consider materials provided and did not offer a personal hearing. The petitioner contended that despite notices indicating a right to personal hearing, no specific date was provided for such hearing. The petitioner relied on Circular No.7/2014, arguing that a personal hearing should be afforded regardless of request. The respondent, however, argued that the petitioner had the option for a personal hearing but did not exercise it.The Court noted that the notices did mention the opportunity for a personal hearing but failed to specify a date for it. Referring to the Circular, which emphasizes the importance of personal hearings and passing orders only after providing a reasonable opportunity to dealers, the Court concluded that the petitioner was not actually given a personal hearing. Consequently, the Court found a violation of natural justice and set aside the assessment orders solely on that ground, without delving into other contentions raised by the parties.Therefore, the Court allowed the writ petitions, setting aside the assessment orders and remitting the matter back to the respondent for fresh assessment orders after affording the petitioner a proper opportunity for a personal hearing with a specified date. The respondent was directed to pass fresh orders within eight weeks from the date of the Court's order. The Court's decision was based on the violation of natural justice, and no costs were awarded. The connected miscellaneous petitions were also closed in light of the judgment.