Tvl.Sri Kailash Chemicals vs. The State Tax Officer(Main)

Held

The Court held that the contention regarding limitation was not sustainable. It referred to Section 27(1)(a) of the TNVAT Act, 2006, which, after amendment effective 19.06.2012, allows for assessment of escaped turnover within six years from the date of assessment. Since the original assessment order was passed on 30.10.2012 and the revision notice was issued on 19.04.2018, the action was initiated within the six-year period. However, the Court found that the impugned order was bad in law and a violation of the principles of natural justice because an opportunity of personal hearing was not afforded to the petitioner. Citing a Division Bench decision in G.V.Cotton Mills (P) Ltd., Vs. The Assistant Commissioner (CT), and the Supreme Court case of Swami Devi Dayal Hospital and Dental College Vs. The Union of India, the Court emphasized the mandatory nature of providing a personal hearing. Consequently, the impugned order was set aside, and the matter was remanded back to the respondent for fresh consideration. The petitioner was directed to submit objections within 15 days, and the respondent was directed to dispose of the matter within one month after affording a personal hearing.

Facts

The petitioner, Tvl.Sri Kailash Chemicals, challenged an assessment order dated 23.05.2018 passed by the respondent, the State Tax Officer (Main), Tuticorin-III. The petitioner was a dealer registered under the TNVAT Act, 2006. An original assessment order for the year 2011-12 was passed on 30.10.2012, which was accepted. Subsequently, a revision notice dated 19.04.2018 was issued on the ground of mismatch turnover. The petitioner did not file any objections, leading to the confirmation of the proposals and the final order dated 23.05.2018. The petitioner contended that the order was barred by limitation as action was not taken within the prescribed period under the unamended provisions of the Tamil Nadu Value Added Tax Act, 2006.

Key Issues

1. Whether the assessment order dated 23.05.2018 is barred by limitation as per the provisions of the Tamil Nadu Value Added Tax Act, 2006? 2. Whether the assessment order dated 23.05.2018 is illegal and arbitrary for violation of principles of natural justice due to denial of personal hearing? Petitioner's arguments: The petitioner argued that the respondent's action was hit by limitation as it was not taken within the 5-year period as per the unamended provision of the TNVAT Act, 2006. They also relied on judicial decisions in M.U.A Arumugaperumal and Sons Vs. Additional Commercial Tax Officer (FAC), Srivilliputhur and Tvl.India Cycle Stores Vs. The Assistant Commissioner (CT), Bazaar Assessment Circle, Salem. Respondent's arguments: The respondent did not explicitly record arguments on limitation. However, the Court examined Section 27 of the TNVAT Act, 2006, which was amended effective 19.06.2012, allowing for action within 6 years. The respondent implicitly relied on the amended provision by issuing the revision notice within 6 years of the original assessment.