Purchasing dealer not liable for seller's suppressed sales; reassessment quashed for ignoring objections and breaching natural justice.

Reassessment under the Tamil Nadu Value Added Tax Act, 2006 was set aside where it was driven by the seller's failure to report sales, because a purchasing dealer cannot be fastened with liability for the seller's default. The court held that the petitioner's objections to the pre-revision notice were not considered in the proper legal perspective, resulting in a breach of natural justice. The reassessment was therefore quashed and the matter remanded for fresh consideration after affording opportunity to file objections and to be heard personally.

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Issues: Whether the reassessment order under the Tamil Nadu Value Added Tax Act, 2006 was liable to be quashed for non-consideration of objections and in view of the principle that a purchaser cannot be fastened with liability for the seller's failure to report sales.

Analysis: The assessment was revised primarily because the other end seller had not reported the sales. The petitioner had replied to the pre-revision notice and asserted that the purchases had been duly reported without suppression. The Court followed the Division Bench view that, where the seller defaults in reporting sales or remitting tax, action lies against the defaulting seller and not against the purchaser. In that background, the objections raised by the petitioner were not considered in the proper legal perspective, amounting to a violation of natural justice.

Conclusion: The reassessment order was quashed and the matter was remanded for fresh consideration after granting opportunity of objection and personal hearing.

Ratio Decidendi: A purchasing dealer cannot be made liable for the seller's failure to disclose sales, and an assessment based on such default must be reconsidered after due consideration of the dealer's objections.

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