Arun Timber.A.T vs. The Deputy State Tax Officer - Ii

Held

The Court held that there was a clear procedural violation in passing the impugned order dated 24.03.2020 without affording the petitioner an opportunity of personal hearing. This violation constitutes a breach of the principles of natural justice. Consequently, the Court set aside the impugned order solely on this ground, without delving into the merits of the case. The matter was remanded back to the respondent authority to pass fresh orders after providing the petitioner with an opportunity of personal hearing. The Court directed that this exercise be completed within three months from the date of receipt of a copy of the order.

Facts

The petitioner, M/s. A.T. Arun Timber, a dealer in timber, was assessed under the erstwhile TNVAT Act for the assessment year 2013-14. Following a notice dated 10.12.2014 due to alleged discrepancies, the petitioner, unable to reply due to ill-health, had the proposal confirmed by the Deputy Commercial Tax Officer (Additional) on 28.05.2015. The petitioner made subsequent representations, including one dated 02.10.2019 under Section 84 of the TNVAT Act, seeking rectification of an apparent error. The respondent, now the Deputy State Tax Officer-II, Karaikudi, rejected these representations via an order dated 24.03.2020, citing non-e-filing of returns for April and May 2013 and discrepancies in reported sales. Recovery proceedings were initiated, prompting this writ petition.

Key Issues

1. Whether the impugned order dated 24.03.2020, passed by the respondent, is liable to be quashed for violating the principles of natural justice, specifically the right to a personal hearing, as contended by the petitioner under Article 226 of the Constitution of India? The petitioner argued that the impugned order was passed without affording an opportunity of personal hearing, which is a clear violation of the principles of natural justice. They relied on the judgments in SRC Projects Pvt Limited Vs. Commissioner of Commercial Taxes, Chennai and M/s.G.V.Cotton Mills (P) Ltd Vs. Assistant Commissioner (CT), Avarampalayam Assessment Circle, Coimbatore. The petitioner also contended that the allegations regarding non-filing of returns and unreported sales were factually incorrect and that their purchases were properly accounted for and tax paid. The respondent, through the learned Government Advocate, fairly submitted that the impugned order was passed without affording an opportunity of personal hearing to the petitioner.