Court sets aside assessment order under TN VAT Act for lack of hearing on issues & penalties. SEZ sales exemption granted.

The court set aside the impugned order of assessment under the Tamil Nadu Value Added Tax Act, 2006, for the period 2007-08 due to the lack of a hearing on certain issues and penalties. The petitioner's claim for exemption on sales to Special Economic Zone was accepted, but other issues from previous assessments were not reconsidered. The court directed the petitioner to appear for a hearing on all pending assessments without further notice, emphasizing the need for a fair opportunity for reconsideration in tax assessments. The writ petition was allowed without costs.

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Issues:
Challenging an order under the Tamil Nadu Value Added Tax Act, 2006 for the period 2007-2008.

Analysis:
The petitioner challenged an order dated 20.04.2018 under the Tamil Nadu Value Added Tax Act, 2006. The original orders of assessment dated 15.07.2015 dealt with nine issues and imposed a penalty for the periods 2008-09, 2010-11, 2011-12, and 2012-13. These orders were challenged in earlier writ petitions and were set aside, directing the Assessing Officer to provide a fresh hearing and pass orders in accordance with the law. Subsequently, new orders of assessment were passed on 15.07.2015, which were again challenged in writ petitions. The court discussed the issue of exemption sought on sales to Special Economic Zone (SEZ) and set aside the impugned order of assessment, remanding the matter for fresh consideration. Both the petitioner and the Department interpreted the order as setting aside the entire assessment.

After a notice was sent in respect of the period 2007-08 regarding the exemption claimed for sales to SEZ, the respondent accepted the petitioner's claim. However, the remaining eight issues from the earlier assessments were not reconsidered, and the original conclusions were reiterated without providing an opportunity for a hearing. Due to the lack of a hearing on these issues and the penalty, the court set aside the impugned order of assessment. The petitioner was directed to appear before the respondent without further notice on a specified date for a hearing on all pending assessments. Orders of assessment were to be passed within four weeks from the conclusion of the hearing. The writ petition was allowed, and no costs were imposed.

This judgment highlights the importance of providing a fair opportunity for a hearing and reconsideration of all issues in assessments under the Tamil Nadu Value Added Tax Act, 2006.

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