Assessment order quashed for lack of natural justice under Tamil Nadu VAT Act. Remand for fresh consideration.

The court quashed the assessment order under the Tamil Nadu Value Added Tax Act, 2006, due to the violation of natural justice principles as the petitioner was not given an opportunity for a personal hearing before the order was passed. The matter was remanded to the respondent for fresh consideration, with directions to allow the petitioner to raise objections and provide a personal hearing within eight weeks. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.

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Issues: Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 without opportunity to produce relevant documents, violation of principles of natural justice, availability of alternative appellate remedy under Section 51 of the Act.

Analysis:

The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged an assessment order dated 15.06.2015, alleging that the respondent did not consider the sales and purchases reported by both the petitioner and the other sellers. The petitioner contended that no request was made to produce invoices, leading to the assessment order demanding payment of additional tax. The petitioner argued that the respondent violated Section 19(1) of the Act by not allowing the submission of relevant documents before passing the order.

During the hearing, the petitioner's counsel highlighted the petitioner's response to the pre-revision notice, where annexures detailing purchases from other sellers were enclosed. The counsel emphasized that the other sellers were also registered under the Act and could have provided clarification if needed. Reference was made to a previous court ruling stating that failure by the selling dealer to disclose turnover does not justify reversing input tax credit for the purchasing dealer. The petitioner asserted that both the selling and purchasing dealers had reported their transactions, indicating compliance.

The respondent's counsel argued that the petitioner had an appellate remedy under Section 51 of the Act and contended that the objections raised by the petitioner were duly considered in the assessment order. However, the court noted that no opportunity for a personal hearing was provided to the petitioner before passing the impugned order, which was a violation of natural justice principles.

Considering the facts and legal precedents, the court quashed the assessment order and remanded the matter to the respondent for fresh consideration. The court directed the respondent to allow the petitioner to raise objections and provide a personal hearing within eight weeks. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.

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