Case Law Details
M. R. Constructions Vs Assistant Commissioner (ST) (Madras High Court)
The case of M. R. Constructions Vs Assistant Commissioner (ST) before the Madras High Court revolves around challenging an assessment order under the TNVAT Act. The core issue was the validity of an assessment order issued long after the initial show cause notices were responded to by the petitioner.
The petitioner, M. R. Constructions, received a show cause notice in 2015 regarding Input Tax Credit. After responding to the notice, there were no further developments until the assessment order was unexpectedly issued in 2024, nearly nine years later. The petitioner argued that they were under the impression that the proceedings had been concluded, given the silence on the matter for such a prolonged period.
Counsel for the petitioner highlighted procedural lapses due to the lack of hearings or updates from 2015 to 2024. This formed the basis for challenging the assessment order on grounds of fairness and procedural justice.
In a notable decision, the Madras High Court set aside the impugned VAT order, emphasizing the necessity for due process and a reasonable opportunity for the petitioner to present their case. The court’s directive for reconsideration includes allowing the petitioner to submit a fresh reply and ensuring a personal hearing, aiming for a fair and just outcome within a specified timeline.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) is challenged in this writ petition. The petitioner received show cause notice dated 12.12.2023 under Section 27 of the TNVAT Act. Such show cause notice was replied to. This was followed by another show cause notice issued in 2015. The petitioner replied thereto on 23.06.2015. The petitioner asserts that there were no developments thereafter until the impugned assessment order was issued on 11.03.2024.
2. Learned counsel for the petitioner submits that the tax proposal relates to the availment of Input Tax Credit by the petitioner. She further submits that the petitioner replied to the show cause notice and was under the impression that proceedings had been dropped. After the lapse of about nine years, she submits that the impugned order was issued.
3. Mr. V. Prasanth Kiran, learned Government Advocate, accepts notice for the respondent. In view of the lapse of a considerable period of time, he submits that the matter may be remanded for reconsideration.
4. The documents on record indicate that no hearings or other developments took place between 2015 and 11.03.2024. Solely on this ground, re-consideration is necessary by providing a reasonable opportunity to the petitioner.
5. Therefore, impugned order dated 11.03.2024 is set aside and the matter is remanded for re-consideration. The petitioner is permitted to submit an additional reply to the show cause notice within fifteen days from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s additional reply.
6. W.P.No.16116 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.No.17649 of 2024 is closed.
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