Natural justice in tax reassessment: writ relief can lie despite alternate remedy when effective hearing after objections is denied.

In tax reassessment matters, the existence of an alternate statutory remedy does not bar writ relief where the pre-revision process denies an effective opportunity of hearing after objections are filed, because such denial violates natural justice. The Madras HC noted that a notice merely referring to a personal hearing was insufficient where the assessee had already submitted objections and documents; an effective post-objection hearing was required, so the assessment orders were set aside and the matter remitted for fresh consideration. The Court also treated a pending refund representation relating to input tax credit on export sales as an independent claim requiring expeditious decision by the competent authority.

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Issues: (i) Whether the writ appeals challenging reassessment orders under the Tamil Nadu Value Added Tax Act, 2006 were maintainable despite the availability of an alternate statutory remedy, in view of the alleged denial of personal hearing and violation of natural justice; (ii) whether the pending refund representation relating to input tax credit on export sales required consideration by the Department.

Issue (i): Whether the writ appeals challenging reassessment orders under the Tamil Nadu Value Added Tax Act, 2006 were maintainable despite the availability of an alternate statutory remedy, in view of the alleged denial of personal hearing and violation of natural justice.

Analysis: The existence of an alternate remedy operates as a restraint on writ jurisdiction, particularly in tax matters, but it is not an absolute bar. An exception arises where the impugned action is vitiated by violation of principles of natural justice. The notice issued before revision, though referring to an opportunity of personal hearing, was not treated as a meaningful post-objection hearing. The assessee had filed objections and documents and was entitled to an effective hearing after the Assessing Officer considered the objections and, if necessary, proposed to proceed against the assessee. In that setting, the first pre-revision notice did not satisfy natural justice, and the writ court ought to have granted relief rather than insisting on the statutory appeal.

Conclusion: The challenge was maintainable, and the assessment orders could not be sustained without affording an effective personal hearing. The appeal was therefore allowed in part and the matter was remitted for fresh consideration.

Issue (ii): Whether the pending refund representation relating to input tax credit on export sales required consideration by the Department.

Analysis: The refund claim was an independent claim and could not be clubbed with the assessment proceedings, but the representation was stated to be pending before the authorities. The Court considered it appropriate that the competent authority decide the matter expeditiously rather than keep it pending indefinitely.

Conclusion: The competent authority was directed to consider and decide the refund representation within the time stipulated by the Court.

Final Conclusion: The writ appeals succeeded to the extent of setting aside the dismissal of the writ petitions and securing a fresh assessment process with personal hearing, while also ensuring consideration of the pending refund claim.

Ratio Decidendi: In tax reassessment matters, an alternate statutory remedy does not preclude writ relief where the pre-revision process denies an effective opportunity of hearing after consideration of objections, because such denial constitutes a violation of natural justice.

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