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of <h1>Judicial Review of Assessment Orders: Emphasizing Natural Justice Principles and Fair Hearings</h1> The court entertained the writ petitions despite the availability of an alternative remedy, citing errors in the assessment orders and violation of ... Validity of assessment order - TNVAT Act - principles of Natural Justice - Section 27 of the TNVAT Act, 2006 - Held that: - This Court was of the opinion that there is not a true compliance of the requirement under Section 27 of the TNVAT Act, 2006 nor would it satisfy the principles of natural justice. This is so because after issuance of SCN, if a dealer submits their objections, there is every likelihood that the Assessing Officer may be convinced with the objections and may even drop the proposal. In such an event, appearing before the Assessing Officer in person is unnecessary. The impugned orders have been passed in violation of the principles of natural justice and that the petitioner did not have adequate opportunity to put forth their objections, as the revision notices were bereft of particulars. Appeal allowed by way of remand. Issues:1. Maintainability of writ petitions due to alternative remedy available under TNVAT Act, 2006.2. Violation of principles of natural justice in reopening assessment orders.3. Interpretation of Notification regarding reduced rate of tax for LDO.4. Compliance with personal hearing requirement under Section 27 of TNVAT Act, 2006.5. Application of common parlance test in interpreting exemption notification.6. Impact of assessment orders on future transactions and cost implications.Issue 1: Maintainability of writ petitions:The learned Government Advocate raised a preliminary objection on the maintainability of the writ petitions, citing the availability of an alternative remedy through an appeal before the Appellate Authority under the TNVAT Act, 2006. However, the court decided to entertain the writ petitions due to glaring errors in the impugned orders, which did not disclose proper facts for reopening the assessment, leading to a disadvantage for the petitioner in meeting the objections. The court held that the violation of natural justice principles justified the petitioner's approach under Article 226 of the Constitution of India.Issue 2: Violation of principles of natural justice:The court found that the respondent failed to disclose the basis for reopening the assessment in the revision notices, depriving the petitioner of a fair opportunity to present objections. The lack of disclosure put the petitioner at a disadvantageous position, justifying the court's intervention under Article 226. The court emphasized the importance of affording parties a chance to respond adequately before proceeding with assessments.Issue 3: Interpretation of Notification on reduced tax rate for LDO:The petitioner argued that the term 'diesel' in the notification referred only to high-speed diesel (HSD) and not to LDO, highlighting differences in specifications and uses between the two products. The court noted the petitioner's interpretations and observed that the respondent's observations in the impugned orders lacked proper disclosure of sources and appeared to be personal opinions. The court directed the respondent to consider the petitioner's objections and redo the assessment in accordance with law.Issue 4: Compliance with personal hearing requirement:The petitioner contended that the impugned orders were made without affording a mandatory personal hearing, as required under Section 27 of the TNVAT Act, 2006. The court agreed that merely offering a personal hearing without considering objections beforehand did not fulfill the principles of natural justice. The court stressed the need for effective personal hearings where objections are duly considered before a decision is made.Issue 5: Application of common parlance test:The petitioner urged the court to apply the common parlance test in interpreting the exemption notification, citing a Supreme Court decision on understanding terms like 'vegetables.' The court acknowledged the importance of interpreting terms in common parlance and directed the respondent to consider such interpretations in the reassessment process.Issue 6: Impact of assessment orders on future transactions:The court recognized the potential cascading effect of the assessment orders on future transactions, leading to increased costs for the petitioner and similar corporations. Considering the recurrent nature of the issue and the violation of natural justice principles, the court directed the respondent to reevaluate the assessments after considering the petitioner's objections and relevant legal interpretations.In conclusion, the court disposed of the writ petitions by treating the assessment orders as show cause notices, allowing the petitioner to submit objections and mandating a personal hearing before redoing the assessments. The court emphasized the importance of affording parties a fair opportunity to present their case and directed the respondent to consider all relevant factors, including legal interpretations, in the reassessment process.
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