Assessment order passed without affording personal hearing is liable to be quashed

PHA India Pvt. Ltd. Vs Assessment Commssioner (ST) (Madras High Court)

Madras High Court held that it is seen from the impugned assessment order that no personal hearing has been afforded to the petitioner. Accordingly, the impugned assessment order is quashed on the ground of violation of principles of natural justice.

Facts- The contention of the petitioner is that the reopening of the assessments u/s. 27 of the TNVAT Act, 2006 which culminated in the impugned Assessment Orders are barred by law of limitation. According to the petitioner, since their assessments have not been reopened within a period of six years from the date of the deemed assessment u/s. 22(2) of the TNVAT Act, 2006, the impugned assessment orders have to be quashed.

According to the petitioner, they did not receive the Show Cause Notice issued by the respondents prior to the passing of the impugned orders to enable them to send a detailed reply. It is also their contention that no personal hearing was afforded to them in the impugned proceedings. Learned counsel for the petitioner drew the attention of this Court to section 27(1) of the TNVAT 2006 and submitted that as per the said section within a period of six years, from the date of the deemed assessment under section 22(2) of the Act, the respondents ought to have reopened the assessment in case of escaped turnover or wrong availment of income tax credit.

Conclusion- The petitioner categorically contends that they never received any Show Cause Notice from the respondents. As seen from the impugned Assessment Orders, no personal hearing has also been afforded to the petitioner. Since the contentions of the petitioner raised in this writ petition have not been considered in the impugned assessment orders and the petitioner has also not been granted personal hearing in the impugned proceedings, necessarily, the impugned assessment orders have to be quashed on the ground of violation of principles of natural justice and the matter has to be remanded back to the first respondent for fresh consideration on merits.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

The petitioner has challenged the assessment orders all dated 30.11.2022 passed by the first respondent under the Tamil Nadu Value Added Tax Act, 2006 on the ground of violation of principles of natural justice.

2. Harsha Raj, learned Additional Government Pleader accepts notice on behalf of the respondents. By consent of both the parties, this writ petition is taken up for final disposal in the admission stage itself.

3. Heard learned counsel for the petitioner and learned Additional Government Pleader appearing for the respondents.

4. The contention of the petitioner is that the reopening of the assessments under section 27 of the TNVAT Act, 2006 which culminated in the impugned Assessment Orders are barred by law of limitation. According to the petitioner, since their assessments have not been reopened within a period of six years from the date of the deemed assessment under section 22(2) of the TNVAT Act, 2006, the impugned assessment orders have to be quashed. According to the petitioner, they did not receive the Show Cause Notice issued by the respondents prior to the passing of the impugned orders to enable them to send a detailed reply. It is also their contention that no personal hearing was afforded to them in the impugned proceedings. Learned counsel for the petitioner drew the attention of this Court to section 27(1) of the TNVAT 2006 and submitted that as per the said section within a period of six years, from the date of the deemed assessment under section 22(2) of the Act, the respondents ought to have reopened the assessment in case of escaped turnover or wrong availment of income tax credit.

5. The details of the assessment orders, date of deemed assessments under section 22(2) of the TNVAT Act, 2006, the date of issuance of Show Cause notices, the date of impugned assessment orders passed by the first respondent in respect of the writ petitions are detailed hereunder:

6. As seen from the above tabular column which is in accordance with the contention of the petitioner in these writ petitions, it is noticed that in respect of reopening of the assessments, it is not within the period of six years from the date of the deemed assessment under section 22(2) of the TNVAT Act, 2006.

7. Admittedly, the petitioner has not sent any reply to the Show Cause Notices sent by the respondents which culminated in passing of the impugned assessment orders. The petitioner categorically contends that they never received any Show Cause Notice from the respondents. As seen from the impugned Assessment Orders, no personal hearing has also been afforded to the petitioner. Since the contentions of the petitioner raised in this writ petition have not been considered in the impugned assessment orders and the petitioner has also not been granted personal hearing in the impugned proceedings, necessarily, the impugned assessment orders have to be quashed on the ground of violation of principles of natural justice and the matter has to be remanded back to the first respondent for fresh consideration on merits.

8. For the foregoing reasons, the impugned Assessment Orders all dated 30.11.2022 are hereby quashed and the matters are remanded back to the first respondent for fresh consideration. The first respondent shall pass final orders on merits and in accordance with law in respect of the contentions raised by the petitioner including the limitation issue, after furnishing a copy of the Show Cause Notices to the petitioner to enable them to submit a detailed reply, after adhering to the principles of natural justice including the limitation issue and also by granting the petitioner a right of personal hearing within a period of three months from the date when the respondents have served on the petitioner a copy of the Show Cause Notices.

9. With the aforesaid directions, these writ petitions are disposed of. No costs. Consequently, connected miscellaneous petitions are closed.