Natural justice in VAT assessment requires effective personal hearing before demand; assessment and notice were quashed and remanded.

A VAT assessment order and consequential notice were quashed where the assessee was not given an effective personal hearing or sufficient opportunity to meet the proposed demand. The Court applied the departmental circular requiring reasonable opportunity before assessment and followed the earlier view that non-compliance with the prescribed procedure, including denial of hearing, amounts to breach of natural justice. As the demand rested on material gathered from the department's own website and the assessee was not shown to have been effectively heard, the matter was remanded for fresh consideration after affording an opportunity of hearing.

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Issues: Whether the assessment demand and consequential notice were liable to be quashed for violation of natural justice on account of denial of personal hearing and insufficient opportunity before passing the order under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The assessment was preceded by a notice under section 22(4) of the Tamil Nadu Value Added Tax Act, 2006, but the Court found that the departmental circular relied on in the case required that reasonable opportunity and personal hearing be afforded before passing assessment orders. The Court also relied on the earlier Division Bench view that non-compliance with the prescribed procedure, including personal hearing, amounts to breach of natural justice. In the facts before it, the demand was based on material gathered from the department's own website and the assessee was not shown to have been given an effective opportunity to meet the proposed demand.

Conclusion: The impugned assessment order and notice were quashed for breach of natural justice, and the matter was remanded for fresh consideration after affording the petitioner an opportunity of hearing.

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