Natural justice in tax assessment requires a requested personal hearing before additions are finalised.

An assessment passed without granting a requested personal hearing is vulnerable for breach of natural justice, as the taxpayer is denied a fair opportunity to meet proposed additions. The turnover dispute also required reconsideration because the assessing authority had not properly examined whether turnover under the Central Sales Tax regime could be clubbed with taxable turnover under the Tamil Nadu Value Added Tax Act, 2006 for crossing the threshold and whether the returns were belated for interest purposes. The matter was therefore remitted for fresh adjudication after hearing the taxpayer, leaving the merits of the turnover computation and interest levy open.

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Issues: (i) Whether the assessment orders were liable to be set aside for breach of natural justice for failure to grant a personal hearing despite a specific request. (ii) Whether the respondent was justified in computing the taxable turnover by clubbing turnover under the Central Sales Tax regime and in treating the returns as belated for the purpose of levy of interest.

Issue (i): Whether the assessment orders were liable to be set aside for breach of natural justice for failure to grant a personal hearing despite a specific request.

Analysis: A specific request for personal hearing had been made in the objections, but no hearing was afforded before passing the assessment orders. The denial of an opportunity of hearing deprived the petitioner of a fair chance to meet the proposed additions and vitiated the orders.

Conclusion: The assessment orders were liable to be set aside for violation of principles of natural justice.

Issue (ii): Whether the respondent was justified in computing the taxable turnover by clubbing turnover under the Central Sales Tax regime and in treating the returns as belated for the purpose of levy of interest.

Analysis: The dispute turned on the meaning of taxable turnover under the Tamil Nadu Value Added Tax Act, 2006 and whether turnover relatable to inter-State transactions under the Central Sales Tax law could be aggregated for crossing the threshold of Rs. 200 crores. The Court found that the impact of the earlier communication of the Joint Commissioner and the legal question on clubbing of turnovers had not been properly examined by the assessing authority. As these factual and legal issues required reconsideration, the matter had to go back for a fresh decision after hearing the petitioner.

Conclusion: The turnover computation and interest levy were not finally upheld and required fresh consideration on remand.

Final Conclusion: The writ petitions succeeded to the extent of setting aside the impugned assessments and directing a fresh adjudication after hearing the petitioner, while leaving the merits of the turnover and interest controversy open for reconsideration.

Ratio Decidendi: An assessment order passed without affording a requested personal hearing is vulnerable for breach of natural justice, and unresolved factual or legal disputes affecting turnover computation must be reconsidered by the assessing authority on remand.

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