Prior notice before penalty under VAT law is mandatory; absence of show-cause opportunity makes the revised order unsustainable.

Penalty under Section 27(4) of the Tamil Nadu Value Added Tax Act could be imposed only after a reasonable opportunity to show cause. The earlier notice dated 19.10.2015 did not propose penalty, and the revenue failed to prove service of the later communication dated 01.04.2019. Because the statutory pre-decisional safeguard of prior notice and opportunity was not satisfied, the revised assessment order was set aside.

---

---

Issues: Whether the revised assessment order levying penalty under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006 was sustainable when the petitioner had not been given notice and an opportunity to show cause before imposition of penalty.

Analysis: The penalty under Section 27(4) could be imposed only after affording a reasonable opportunity of showing cause. The earlier notice dated 19.10.2015 did not refer to any proposed penalty, and the revenue could not establish service of the later communication dated 01.04.2019. In the absence of proof of notice regarding the proposed penalty, the pre-decisional safeguard mandated by the statute was not satisfied.

Conclusion: The revised assessment order was liable to be set aside for violation of the requirement of prior notice and opportunity before imposing penalty under Section 27(4).

---