Tvl. Krishna Eletricals vs. The Commissioner Of

Held

The Court held that the assessment orders dated 25.03.2015 were procedurally flawed. The Court found that no personal hearing was afforded to the petitioner, despite the petitioner filing a detailed response to the pre-assessment notice. The Court noted that the assessing authority had only xerox copies of bills and could have sought original bills or other required details as per Rule 10(2) of the VAT Rules, which it failed to do. Furthermore, the Court observed that the second assessment order, which reversed the entire ITC claim of Rs. 1,34,520/- along with a penalty of Rs. 67,260/-, was an afterthought and was passed without issuing any notice to the petitioner. Consequently, the Court quashed both assessment orders. The Court directed the assessing authority to re-do the assessment afresh in accordance with law and in line with Circular No. 3 of 2019 dated 18.01.2019, providing adequate opportunity to the petitioner.

Facts

The petitioner, Tvl. Krishna Electricals, challenged two assessment orders dated 25.03.2015 passed by the Deputy Commercial Tax Officer, Thirunelveli Bazaar Assessment Circle, under the Tamil Nadu Value Added Tax Act, 2006, for the period 2013-14. A pre-assessment notice dated 19.02.2015 had proposed the reversal of Input Tax Credit (ITC) amounting to Rs. 1,05,147/- out of a total claim of Rs. 3,23,514/-. The petitioner responded on 12.03.2015, reconciling ITC with purchases for 7 dealers, detailing the entire ITC claim of Rs. 1,34,520/-. No personal hearing was afforded. The assessing authority passed two orders on the same date, one confirming the proposal except for Rs. 1,058/-, and the second, an apparent afterthought, reversing the entire ITC amount of Rs. 1,34,520/- along with a penalty of Rs. 67,260/-, without issuing any notice.

Key Issues

1. Whether the assessment orders dated 25.03.2015, passed by the Deputy Commercial Tax Officer, are vitiated by procedural irregularities, specifically the failure to afford a personal hearing and the issuance of two separate orders for the same period and transactions. (Question of law). Petitioner's arguments: The petitioner contended that the assessment orders were passed without providing an adequate opportunity to be heard, which is a fundamental principle of natural justice. They argued that the issuance of two distinct assessment orders on the same date for the same tax period, one of which appeared to be an afterthought and was passed without notice, rendered the entire assessment process flawed. The petitioner also highlighted that the assessing officer failed to seek original bills or further details as required by Rule 10(2) of the VAT Rules, relying solely on Xerox copies. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or state.