Purchaser liability and natural justice requirements led to quashing of reassessment and remand for fresh hearing.

A purchaser who has duly accounted for purchases cannot be fastened with tax liability merely because the corresponding seller failed to report the sales; the stated principle is that action for non-reporting lies against the defaulting seller, not the compliant purchaser. The assessment was also found vulnerable because it was passed without adequate opportunity and personal hearing, violating natural justice. On those grounds, the assessment order was quashed and the matter remanded for fresh consideration with directions to afford the petitioner a proper opportunity and hearing.

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Issues: (i) Whether the revision of assessment could be sustained when the purchaser had reported the purchases and the proposed action was based on the other end seller's failure to report sales. (ii) Whether the assessment order was vitiated for breach of natural justice due to denial of a proper opportunity and personal hearing.

Issue (i): Whether the revision of assessment could be sustained when the purchaser had reported the purchases and the proposed action was based on the other end seller's failure to report sales.

Analysis: The assessment was revised under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 on the premise that the seller had not reported the sales made to the petitioner. The purchases made by the petitioner had been duly reported without suppression. The applicable principle was that action for non-reporting by the seller lies against the defaulting seller and not against the purchaser who has accounted for the transactions.

Conclusion: The revision could not be sustained on that basis and was against the petitioner.

Issue (ii): Whether the assessment order was vitiated for breach of natural justice due to denial of a proper opportunity and personal hearing.

Analysis: The record showed that the impugned order was passed without adequate opportunity. The Court applied the requirement that an assessee must be given sufficient opportunity to raise objections and be granted personal hearing before final orders are passed. On that ground, the proceedings were found to have violated principles of natural justice.

Conclusion: The assessment order was vitiated for breach of natural justice and could not stand.

Final Conclusion: The assessment order was quashed and the matter was sent back for fresh consideration with a direction to afford opportunity and personal hearing to the petitioner.

Ratio Decidendi: A purchaser cannot be fastened with tax liability merely because the seller failed to report the corresponding sales, and an assessment order passed without giving adequate opportunity and personal hearing is liable to be set aside.

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