Tvl. S.R. Ravi vs. The Commercial Tax Officer

Held

The Court held that personal hearing must be afforded to the dealer before passing assessment orders under Section 27 of the TN VAT Act, 2006. It also reiterated the settled principle that input tax credit should not be reversed solely on the ground that other end sellers, who are unregistered or have not filed returns or paid taxes, are at fault, provided the petitioner has reported their purchases and there is no suppression. In this case, the Court found that the petitioner had reported all purchases and denied suppression. Therefore, the Court concluded that the petitioner ought to have been given adequate opportunity by the respondent before passing the impugned assessment orders. Consequently, the impugned assessment orders were quashed, and the matter was remanded back to the respondent for fresh consideration. The respondent was directed to grant an adequate opportunity, including a personal hearing, and pass fresh orders within eight weeks, in light of the decision in Infiniti Wholesale Ltd Vs Assistant Commissioner (CT) reported in (2015) 55 taxmann.com 64 (Madras).

Facts

The petitioner, S.R.Ravi, a dealer in oil, filed multiple writ petitions challenging assessment orders passed by the Commercial Tax Officer, Pattukottai. The assessment orders pertained to the tax periods 2011-2012, 2012-2013, and 2013-2014. The petitioner contended that the assessment orders were passed based on a web report, alleging that other end sellers had wrongly quoted the petitioner's TIN number and suppressed sales. The petitioner claimed to have duly reported all purchases. A key grievance was the alleged lack of adequate opportunity for a personal hearing before the orders were passed, despite the respondent claiming notices were issued. The petitioner also argued that objections were filed after the scheduled hearing date and were not considered.

Key Issues

1. Whether the assessment orders passed by the respondent under Section 27 of the TN VAT Act, 2006, are liable to be quashed for failure to afford adequate opportunity of personal hearing to the petitioner? 2. Whether the assessment orders, which are primarily based on a web report, are sustainable in law, especially when the petitioner claims to have reported all purchases and there was no suppression? Petitioner's Arguments: The petitioner argued that the assessment orders were passed without granting a proper personal hearing, which is a settled legal principle. They contended that the reliance solely on a web report, which is not an independent source of information, was improper. Furthermore, the petitioner asserted that they had reported all purchases and denied any suppression of sales, and that their objections, filed after the hearing date, were not considered. They relied on judicial pronouncements emphasizing the necessity of personal hearing. Respondent's Arguments: The respondent argued that notices for personal hearing were issued to the petitioner, but the petitioner failed to avail them. The judgment does not explicitly detail further arguments from the respondent regarding the web report or the merits of the assessment.