Limitation and natural justice in reassessment: timely initiation saved the demand, but denial of personal hearing vitiated the order.

Reassessment under the Tamil Nadu General Sales Tax Act was found not to be barred by limitation where the proceedings had been initiated within the statutory period, even though the final order was passed later. The limitation objection was rejected. The reassessment was, however, held unsustainable because the dealer had not been afforded personal hearing or a reasonable opportunity before finalisation of the order. On that basis, the impugned reassessment was set aside and the matter was remitted for fresh consideration after compliance with the hearing requirement.

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Issues: (i) Whether the reassessment was barred by limitation under section 16(1)(a) of the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether the reassessment order was liable to be interfered with for want of personal hearing and reasonable opportunity.

Issue (i): Whether the reassessment was barred by limitation under section 16(1)(a) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The assessment order had been issued on 27.02.2004, the pre-revision notice was issued on 28.02.2006, replies were received thereafter, and the impugned order was passed on 16.03.2009. On these facts, the time bar contended for by the appellant did not assist the challenge, since the proceedings had been initiated within the statutory period.

Conclusion: The limitation challenge was rejected and the point was decided against the assessee.

Issue (ii): Whether the reassessment order was liable to be interfered with for want of personal hearing and reasonable opportunity.

Analysis: The record showed that before passing the impugned reassessment order, the appellant was not afforded personal hearing. In the context of revision proceedings, a dealer was entitled to a reasonable opportunity and, where required, personal hearing before the order was finalised. The absence of such opportunity vitiated the impugned order on the facts of the case.

Conclusion: The reassessment order was liable to be set aside for violation of the requirement of reasonable opportunity and personal hearing, in favour of the assessee.

Final Conclusion: The appeal succeeded only on the ground of denial of personal hearing, while the limitation objection failed; the matter was sent back for fresh reconsideration after compliance with the stated condition.

Ratio Decidendi: A reassessment made within the statutory time frame is not invalid on limitation grounds merely because the final order is later passed, but an order passed without affording the dealer reasonable opportunity and personal hearing is unsustainable.

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