Tvl. Siva Automotive Trading Private Limited vs. The Assistant Commissioner (St)

Held

The Court held that the assessment order dated 28.08.2023 was passed in violation of the principles of natural justice, primarily due to the lack of a personal hearing granted to the petitioner. The Court also noted the petitioner's contention regarding the incorrect calculation of the number of vehicles. While the Court did not delve into the merits of the Input Tax Credit claim or the exact number of vehicles, it found sufficient grounds to quash the order on procedural irregularities. The Court directed the petitioner to pay a portion of the tax, Rs. 7,50,000/-, within four weeks. Upon payment, the respondent was ordered to conduct a fresh inquiry and afford the petitioner a personal hearing. The petitioner was also granted liberty to raise the issue of limitation during the fresh proceedings. The Court expressly left undecided the substantive issues regarding Input Tax Credit and the correct number of vehicles, as these were to be addressed in the fresh inquiry.

Facts

The petitioner, Tvl. Siva Automative Trading Private Limited, an authorized Maruti Car dealer, filed a writ petition challenging an assessment order dated 28.08.2023 passed by the Assistant Commissioner (ST). The petitioner had paid entry tax on motor vehicles entering the State under the Tamil Nadu Tax on Entry on Motor Vehicles to Local Area Act, 1990, and also TNVAT at 14%. The petitioner contended that they were entitled to claim Input Tax Credit, which the respondent denied. Furthermore, the petitioner claimed that the respondent erroneously considered 503 cars instead of the actual 372 cars received during the financial year 2013-2014. The assessment order was passed after ten years without granting a personal hearing. The disputed amount in the impugned order, including entry tax and penal interest, amounted to Rs. 1,56,62,095/-.

Key Issues

1. Whether the assessment order dated 28.08.2023 passed by the respondent is liable to be quashed on the grounds of violation of principles of natural justice, specifically the lack of a personal hearing and the alleged incorrect calculation of the number of vehicles, thereby impacting the Input Tax Credit claim? (Mixed question of law and fact, concerning principles of natural justice and assessment procedures). Petitioner's Arguments: The petitioner argued that the assessment order was passed after a significant delay of ten years and without affording them a personal hearing, thus violating the principles of natural justice. They also contended that the respondent erred in calculating the number of vehicles, taking 503 instead of 372, which affected their eligibility for Input Tax Credit. The petitioner sought to quash the impugned order. Respondent's Arguments: The respondent's contentions are not explicitly recorded in the judgment regarding the specific arguments against the petitioner's claims on natural justice or the calculation of vehicles. However, the respondent issued the impugned order demanding entry tax and penal interest.