Reassessment needs fair hearing and independent reasoning when gross profit disputes require evaluation of the assessee's explanation.

Reassessment under the Tamil Nadu VAT Act could not be sustained where the turnover dispute required consideration of the assessee's explanation on gross profit but no effective opportunity to explain was given. The Court held that, even without an express statutory hearing requirement, an evaluative dispute calling for rival submissions must be preceded by a fair opportunity, and the reassessment became unsustainable. The assessments were also vitiated because the assessing authority mechanically adopted the Enforcement Wing's proposal without independent application of mind or fresh reasoning. On that basis, the assessment orders were quashed and the assessee succeeded.

---

---

Issues: (i) Whether reassessment under Section 27 of the Tamil Nadu Value Added Tax, 2006 could be sustained without affording personal hearing where the turnover dispute required consideration of the assessee's explanation on gross profit. (ii) Whether the impugned assessments were vitiated for having adopted the Enforcement Wing's proposal without independent application of mind by the assessing authority.

Issue (i): Whether reassessment under Section 27 of the Tamil Nadu Value Added Tax, 2006 could be sustained without affording personal hearing where the turnover dispute required consideration of the assessee's explanation on gross profit.

Analysis: Section 27 did not expressly mandate a personal hearing in the same manner as the proviso to Section 22(4), but the Court held that where the issue turned on rival positions requiring deliberation, the assessing authority was bound to call upon the assessee to explain its stand. The dispute on the rate of gross profit was not a mechanical one and the assessee should have been given an opportunity to justify the adopted methodology and the rate applied.

Conclusion: The absence of personal hearing in the circumstances rendered the reassessment orders unsustainable and was fatal to the assessments.

Issue (ii): Whether the impugned assessments were vitiated for having adopted the Enforcement Wing's proposal without independent application of mind by the assessing authority.

Analysis: The assessing authority was required to consider the material independently and could not merely reproduce the Enforcement Wing's view. The assessments showed no fresh material or independent reasoning and simply adopted the rate suggested by the Enforcement Wing. Such mechanical adoption amounted to non-application of mind.

Conclusion: The impugned orders were vitiated by non-application of mind and could not be sustained.

Final Conclusion: The assessment orders were quashed and the writ petitions were allowed, leaving the assessee successful on the substantive challenge.

Ratio Decidendi: Even where a statute does not expressly require a personal hearing, reassessment that turns on a disputed and evaluative question must be preceded by an effective opportunity to explain, and the assessing authority must independently assess the material rather than adopt an enforcement report mechanically.

---