M/S.Hotel Theni International vs. The Assistant Commissioner (CT)

Held

The Court held that there was merit in the petitioner's submission that the impugned order violated the principles of natural justice. The Court found that the respondent passed the impugned order confirming the proposal without dealing with the petitioner's specific request for furnishing details. The Court noted that the assessment order itself recorded the petitioner's request for details but then proceeded to confirm the proposal without addressing it. This failure to deal with the petitioner's request constituted a violation of natural justice, as the petitioner was not put on notice of the material sought to be used in framing the assessment, making it difficult to respond. Consequently, the impugned order dated 11.12.2018 was set aside. The respondent was directed to complete the assessment afresh after furnishing the details sought by the petitioner and granting them a reasonable opportunity of hearing. The Court expressly left undecided the issue of limitation under Section 27 of the TNVAT Act, 2006, as the primary ground for setting aside the order was the violation of natural justice.

Facts

The petitioner, M/s. Hotel Theni International, filed a writ petition challenging an assessment order dated 11.12.2018 for the assessment year 2008-09, passed by the Assistant Commissioner (CT), Theni. The assessment was based on an inspection by the Enforcement Wing, which found that the petitioner had supplied free snacks and complimentary breakfast without supporting documents and that intranet website verification revealed mismatches. The petitioner had requested specific details and documents from the respondent on 24.10.2017, prior to the impugned order, to address the alleged discrepancies. The respondent issued a notice fixing personal hearing on 31.10.2017. The petitioner contends that the impugned order was passed without furnishing the requested details or dealing with their objections, violating principles of natural justice.

Key Issues

1. Whether the assessment order dated 11.12.2018, passed by the respondent, is liable to be quashed for violating the principles of natural justice, specifically concerning the failure to furnish requested details and deal with objections, as contemplated under Section 27 of the TNVAT Act, 2006? Petitioner's Arguments: The petitioner argued that the impugned order was passed in violation of the principles of natural justice because the respondent failed to furnish the details requested by the petitioner in their letter dated 24.10.2017, and did not deal with their objections. This failure prevented the petitioner from adequately responding to the proposed assessment. The petitioner relied on the principle that a party must be put on notice of the material used against them. Respondent's Arguments: The respondent contended that a notice of personal hearing was granted and reiterated the grounds stated in the assessment order. The respondent argued that the petitioner was not denied the free supply of food and that the internet advertisement indicated complimentary breakfast. They also stated that the petitioner did not produce documents or furnish details even after receiving summons and notice.