Reasonable opportunity in VAT assessment required consideration of dealer's reply before adverse order; assessment and demand notice set aside.

An assessment under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 must reflect consideration of the dealer's reply and compliance with the statutory requirement of a reasonable opportunity before an adverse order is passed. Where the impugned assessment does not show such consideration, the order cannot be sustained. A demand notice founded entirely on that assessment falls with it. The Madras High Court therefore set aside the assessment order and the consequential demand notice, and remitted the matter for fresh assessment after considering the dealer's reply, without entering any finding on the tax merits.

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Issues: Whether the assessment order was liable to be set aside for failure to consider the dealer's reply and whether the consequential demand notice could survive.

Analysis: The assessment was made under Section 27 of the Tamil Nadu Value Added Tax Act, 2006, which requires that the dealer be given a reasonable opportunity before an adverse order is passed. The impugned order did not reflect consideration of the dealer's reply to the show cause notice. The statutory requirement of fair hearing was therefore not shown to have been complied with. Since the demand notice was founded on the assessment order, it stood on the same footing.

Conclusion: The assessment order was set aside and the consequential demand notice was also set aside, in favour of the assessee.

Final Conclusion: The matter was remitted for a fresh assessment after consideration of the dealer's reply, with no finding on the merits of the tax dispute.

Ratio Decidendi: An assessment order under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 cannot be sustained unless the authority's order s that the dealer's reply to the show cause notice was considered and the statutory requirement of reasonable opportunity was complied with.

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