Hotel Theni International vs. The Asst Commissioner(CT)

Held

The Court held that there was merit in the petitioner's submission that the principles of natural justice were violated. The respondent, in passing the impugned order, failed to deal with the petitioner's specific request for furnishing details. The Court noted that unless the petitioner is put on notice of the material being used against them, they cannot effectively respond to the proposals. The Court found that the failure to address the petitioner's request for details vitiated the impugned proceedings. Consequently, the Court set aside the impugned order dated 11.12.2018. The respondent was directed to complete the assessment afresh in accordance with the law, after furnishing the details sought by the petitioner and granting them a reasonable opportunity of being heard. The issue of limitation under Section 27 of the TNVAT Act, 2006, was not expressly decided as the matter was remanded on grounds of procedural irregularity.

Facts

The petitioner, M/s. Hotel Theni International, represented by its partner Vinoth Mathew, filed a writ petition challenging an assessment order dated 11.12.2018 for the assessment year 2009-10, passed by the Assistant Commissioner (CT), Theni II Assessment Circle. The impugned order was based on an inspection by Enforcement Wing officers, which allegedly found that the petitioner supplied free snacks and complimentary breakfast without supporting documents for Input Tax Credit (ITC) claims and indicated mismatches on an intranet website. The petitioner had requested specific details from the respondent regarding the figures used and the transactions related to the alleged mismatch in a letter dated 24.10.2017. However, the respondent passed the assessment order without furnishing these details or addressing the petitioner's objections.

Key Issues

1. Whether the assessment order dated 11.12.2018, passed by the respondent for the assessment year 2009-10, is arbitrary, illegal, and barred by limitation under Section 27 of the TNVAT Act, 2006? 2. Whether the respondent violated the principles of natural justice by passing the assessment order without furnishing the requested details and without dealing with the petitioner's objections? Petitioner's arguments: The petitioner contended that the assessment 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 address their objections. This failure prevented the petitioner from effectively responding to the proposed assessment. The petitioner also argued that the order was barred by limitation under Section 27 of the TNVAT Act, 2006. Respondent's arguments: The respondent argued that a notice of personal hearing was granted and reiterated the grounds mentioned in the assessment order. The respondent's counsel did not specifically address the petitioner's request for details or the alleged violation of natural justice beyond stating that a hearing was granted.