Court overturns tax assessment orders due to lack of natural justice, remands for fresh hearing.

The Court allowed the Writ Petitions challenging the impugned orders of the second respondent related to the assessment years 2013-14 to 2015-16. The Court found that there was a violation of natural justice as the petitioner was not provided with a proper opportunity for a personal hearing as required by law. The impugned orders were set aside, and the matters were remanded to the respondent for fresh consideration, with directions for a specific hearing date to be scheduled in advance. The petitioner was instructed to cooperate in the enquiry, and the respondent was directed to pass reasoned orders within four weeks after the hearing, with no costs incurred.

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Issues involved:
Challenging impugned orders of the second respondent, violation of principles of natural justice, levy of penalty under Section 22(5) of the TNVAT Act, failure to provide opportunity of personal hearing, threshold limit of turnover under Section 3(1)(b) of the TNVAT Act, alternative remedy of statutory appeal under Section 51 of the TNVAT Act.

Analysis:

The petitioner, a dealer in municipal contractor and an assessee, challenged the impugned orders of the second respondent regarding the assessment years 2013-14 to 2015-16. The second respondent proposed to levy a penalty under Section 22(5) of the TNVAT Act due to discrepancies in purchase details, treated as sales suppression. The petitioner contended that the notice issued lacked enquiry and violated principles of natural justice by not providing a personal hearing as required by Section 22(4) of the Act. The petitioner emphasized the absence of wilful non-disclosure of turnover liable for assessment under Section 22(4) of the Act.

The petitioner argued that the turnover determined by the second respondent did not exceed the threshold limit as per Section 3(1)(b) of the TNVAT Act, which exempts from tax liability. The petitioner sought to quash the impugned orders and requested a redo of the assessment with a proper opportunity for a personal hearing. The Special Government Pleader for the respondents pointed out the petitioner's failure to file objections after receiving the notice and highlighted the availability of an alternative remedy through a statutory appeal under Section 51 of the TNVAT Act within the prescribed time.

The Court considered both sides' submissions and documents. It noted the petitioner's claim of a violation of natural justice by not granting a personal hearing and the failure to specify dates for such a hearing as required by law. The Court referenced a prior decision emphasizing that the failure to submit objections does not justify denying the right to a personal hearing. Consequently, the Court set aside the impugned orders and remanded the matters to the respondent for fresh consideration. The petitioner was directed to respond within two weeks, and the respondent was instructed to schedule a specific hearing date in advance. Cooperation in the enquiry and availing personal hearing were emphasized, with the directive for the respondent to pass reasoned orders within four weeks after the hearing.

In conclusion, the Writ Petitions were allowed on the condition of providing a proper opportunity for a personal hearing, with no costs incurred. The connected Miscellaneous Petitions were closed as a result of the judgment.

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