Escaped assessment and alternate remedy rule under Tamil Nadu VAT: show-cause opportunity sufficed, writ relief was refused.

A revised assessment based on escaped turnover was treated as an assessment under Section 27(1) of the Tamil Nadu Value Added Tax Act, 2006, not a best judgment assessment under Section 22(4). On that basis, the statute required only a reasonable opportunity to show cause, and personal hearing was not mandatory. In fiscal matters, the writ petition was not entertained because an efficacious statutory appeal remedy was available and no exceptional ground was shown. The time spent in writ proceedings was directed to be excluded while computing limitation for the appeal, preserving the assessee's right to pursue the appellate remedy.

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Issues: (i) Whether the revised assessment order was one under Section 27(1) of the Tamil Nadu Value Added Tax Act, 2006, or a best judgment assessment under Section 22(4) of that Act, and whether personal hearing was mandatory; (ii) Whether the writ petition was liable to be entertained notwithstanding the statutory appeal remedy and whether the time spent in writ proceedings was to be excluded for limitation.

Issue (i): Whether the revised assessment order was one under Section 27(1) of the Tamil Nadu Value Added Tax Act, 2006, or a best judgment assessment under Section 22(4) of that Act, and whether personal hearing was mandatory.

Analysis: Section 27(1) and Section 22(4) operate in different situations. Section 22(4) deals with a dealer who has not filed returns, or has filed incomplete or incorrect returns, and its proviso requires a reasonable opportunity of being heard. Section 27(1) applies to escaped assessment and the related proviso requires only a reasonable opportunity to show cause. The assessment in question arose from an enforcement inspection, followed by a show-cause notice, reply, further verification, and a revised assessment. The statutory text and the departmental circular relied on by the Court also reflected the distinction between personal hearing under Section 22(4) and show-cause opportunity under Section 27. The Court further held that the case involved escaped assessment and not a mere no-return best judgment situation.

Conclusion: The order was correctly treated as a revised assessment under Section 27(1), and personal hearing was not mandatory; the opportunity to show cause was sufficient.

Issue (ii): Whether the writ petition was liable to be entertained notwithstanding the statutory appeal remedy and whether the time spent in writ proceedings was to be excluded for limitation.

Analysis: In fiscal matters, the alternate remedy rule is applied with rigour, and writ interference is justified only in recognised exceptional cases such as lack of jurisdiction or violation of natural justice. The impugned order did not fall within any such exception. A statutory appeal was available under Section 51 of the Tamil Nadu Value Added Tax Act, 2006. The Court also held that the time spent in the writ proceedings should be excluded while computing limitation for the appeal, so that the assessee could still pursue the statutory remedy.

Conclusion: The writ petition was not entertained on merits, and the petitioner was relegated to the statutory appeal remedy with exclusion of the writ period for limitation.

Final Conclusion: The assessment was upheld in writ jurisdiction, with liberty preserved to pursue the appellate remedy under the Act and with protection as to limitation for that remedy.

Ratio Decidendi: Where the statute prescribes a show-cause opportunity for revised assessment on escaped turnover, personal hearing is not an invariable requirement unless the statute so provides; in fiscal matters, writ relief will ordinarily be declined when an efficacious statutory appeal is available and no exceptional ground is made out.

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