Tvl.S.R.&Co. vs. The Deputy Commissioner

Held

The Court held that the second respondent violated the principles of natural justice by not affording the petitioner sufficient opportunity to place all objections available to them under law and by not granting a personal hearing. The Court noted that the impugned assessment order failed to consider crucial factors, including the fact that the tax amount of Rs.31,200/- had already been paid by the fourth respondent for the sale to the petitioner, as evidenced by the invoice dated 01.10.2012 and Annexure II filed by the fourth respondent. The date of cancellation of the fourth respondent's registration was also not disclosed in the order. The Court found that if the petitioner had been given a sufficient opportunity to present their objections and supporting documents, the impugned order might not have been passed. Consequently, the Court quashed the impugned assessment order and remanded the matter back to the second respondent for fresh consideration. The second respondent was directed to pass final orders after affording the petitioner sufficient opportunity to raise all objections and granting a personal hearing, within eight weeks.

Facts

The petitioner, TVL.S.R. & Co., a dealer registered under the Tamil Nadu Value Added Tax Act, 2006, filed a writ petition challenging an assessment order dated 12.05.2015 passed by the second respondent (Commercial Tax Officer). The petitioner argued that the assessment order was passed without affording them an opportunity to raise objections to a pre-revision notice. They contended that the fourth respondent, the other end seller, had already paid tax on the invoice dated 01.10.2012 for goods sold to the petitioner, and this sale was reported by the fourth respondent. Despite this, the impugned order directed the petitioner to pay tax of Rs.31,200/- along with interest. The petitioner also noted that the date of cancellation of the fourth respondent's registration was not disclosed in the order, and the tax amount had already been paid by the fourth respondent.

Key Issues

1. Whether the second respondent violated the principles of natural justice by passing the impugned assessment order without affording the petitioner sufficient opportunity to raise objections and without granting a personal hearing, thereby contravening Section 73 of the Tamil Nadu Value Added Tax Act, 2006 (implied by the context of assessment and opportunity)? Petitioner's Arguments: - The assessment order was passed without providing an adequate opportunity to raise objections to the pre-revision notice. - The tax amount of Rs.31,200/- had already been paid by the fourth respondent (other end seller) for the sale effected to the petitioner, as evidenced by the invoice dated 01.10.2012 and the fourth respondent's tax payment report. - The date of cancellation of the fourth respondent's registration was not disclosed in the assessment order. Revenue's Arguments: - Under Section 19(15) of the Tamil Nadu Value Added Tax Act, 2006, if a selling dealer's registration is cancelled, the purchasing dealer who availed input tax credit is liable to pay the amount availed. - In this case, the fourth respondent's registration was cancelled, making the petitioner liable to pay tax for the purchase. - An alternative efficacious appellate remedy was available to the petitioner, which they failed to pursue.