Reasonable opportunity before penalty under Tamil Nadu VAT law was mandatory, so revised assessment orders were set aside.

Revised assessment orders imposing penalty under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006 were unsustainable because the record did not show a reasonable opportunity to show cause before penalty was levied. The proviso to Section 27(4) required such an opportunity, and the absence of notice and personal hearing vitiated the penalty orders. The Madras HC therefore set aside the revised assessment orders and directed reconsideration after personal hearing.

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Issues: Whether the revised assessment orders imposing penalty under Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006 were liable to be set aside for want of a reasonable opportunity to show cause against the penalty.

Analysis: The writ petitions were found to be covered by an earlier common order on identical facts and the same core issue. The impugned orders had imposed 100% penalty under Section 27(4), but the record did not show that the assessee was given a reasonable opportunity of showing cause against such imposition. The proviso to Section 27(4) required an opportunity before penalty could be levied, and the absence of such opportunity rendered the orders unsustainable.

Conclusion: The revised assessment orders were set aside on the ground of non-compliance with the proviso to Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006, and the matter was directed to be reconsidered after personal hearing.

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