Case Law Details
Tvl. P. C. S. Trades Vs Commissioner of Commercial Taxes (Madras High Court)
The Madras High Court recently adjudicated on two Writ Petitions challenging Assessment Orders related to VAT under the TNVAT Act for the years 2014-2015 and 2015-2016. The petitioner contested the levy of purchase tax and raised objections against the Assessment Orders dated 28.09.2022. Central to the case was the contention that the orders were passed hastily without adequate consideration of the petitioner’s submissions.
The dispute centered around the procedural fairness of the assessment process. The petitioner had received pre-revision notices since 2020 and had been actively participating in the proceedings by responding to notices and attending personal hearings. Despite the petitioner’s request for further time to submit objections and evidence, the Assessment Orders were unexpectedly issued on 28.09.2022.
Furthermore, the petitioner’s subsequent application under Section 84 of the TNVAT Act, seeking revision of the orders, was summarily rejected by the second respondent without due consideration of the petitioner’s representations. The Madras High Court scrutinized these actions and observed that the rejection of the revision request appeared to have been done hastily, especially considering the substantial tax amounts involved: ₹91,46,490 for 2014-2015 and ₹68,98,819 for 2015-2016.
In its judgment dated 09.11.2022, the court noted procedural lapses and undue haste in passing the impugned orders. To rectify the situation and balance the interests of the petitioner, the court set aside the orders dated 09.11.2022, allowing the petitioner to deposit 10% of the disputed tax within 30 days for a fresh hearing. The court emphasized the importance of a fair hearing and directed the second respondent to reconsider the matter, taking into account all relevant documents and previous assessment orders.
The Madras High Court’s decision underscores the significance of procedural fairness in tax assessments. The case highlights the need for authorities to diligently consider taxpayer submissions and conduct assessments in accordance with statutory provisions. By setting aside the hasty orders and allowing for a fresh hearing, the court has upheld principles of natural justice and provided the petitioner with an opportunity to present their case comprehensively.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In these two Writ Petitions, the petitioner has challenged the impugned Assessment Orders both dated 28.09.2022 for the Assessment Years 2014-2015 and 2015-2016.
2. The dispute relates to levy of purchase tax under Section 12 of the Tamil Nadu Value Added Tax Act, 2006 [hereinafter referred to as “the TNVAT Act”]. The records reveals that the petitioner has been receiving pre-revision notices from the year 2020, to which the petitioner has also replied and thereafter, several opportunities were granted to the petitioner to come for a personal hearing. Finally, the second respondent has issued hearing notice dated 12.09.2022, though it has been titled as “pre-assessment notice”. The petitioner has however, sent a letter dated 21.09.2022 and sought further time for filing objections along with documentary evidences. Thereafter, the petitioner claims to have sent a letter dated 03.10.2022 along with the details of import from other State. However, the impugned orders have been passed on 28.09.2022.
3. It is the case of the petitioner that in response to the letter dated 21.09.2022 for the Assessment Year 2014-2015, the Officer should have either informed the petitioner that his request for adjournment was either being allowed or rejected. Therefore, it was not open for the second respondent to have passed the impugned orders dated 28.09.2022 for the respective Assessment Years.
4. It is further submitted that the petitioner has also succeeded in similar issues arising for the Assessment Year 2013-2014 on 31.10.2022. It is further submitted that as far as the Assessment Years 2014-2015 and 2015-2016 are concerned, after the impugned orders were passed on 28.09.2022, the petitioner has also filed an application under Section 84 of the TNVAT Act, which has been rejected by the second respondent without considering the representation of the petitioner, dated 09.11.2022, vide order dated 09.11.2022.
5. A reading of the order dated 09.11.2022, rejecting the request of the petitioner for revision of the assessment made on 28.09.2022 reveals that the order has been passed in undue haste. The dispute pertains to the Assessment Years 2014-2015 and 2015-2016 and the amount involved are huge. For the Assessment Year 2014-2015, the tax amount is Rs.91,46,490/- and the amount of tax involved for the Assessment Year 2015-2016 is Rs.68,98,819/-.
6. In view of the above, to balance the interest of the petitioner, I am inclined to set aside the orders dated 09.11.2022, rejecting the Petition filed by the petitioner for revision of the orders dated 28.09.2022, subject to the petitioner depositing 10% of the disputed tax before the second respondent in cash by way of D.D. within a period of 30 days from the date of receipt of copy of this order. The petitioner shall appear for personal hearing before the second respondent before fresh orders are passed. It is made clear that the petitioner shall also co-operate with the second respondent and produce all the documents that are required for passing fresh orders on merits and in accordance with law. The second respondent shall also take note of the assessment orders passed for the respective Assessment Years 2012-2013 and 2013-2014 on 31.10.2022 while passing the fresh order, if it has any bearing to the facts of the case.
7. These Writ Petitions stand disposed of with the above directions. No costs. Consequently, connected Miscellaneous Petitions are closed.
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