Tvl.Fairdeal Enterprises vs. The Commercial Tax Officer

Held

The Court held that the assessment orders dated April 27, 2018, and May 12, 2018, were liable to be set aside due to the non-compliance with the mandatory procedure of affording a personal hearing to the petitioner. The Court referred to the instructions issued by the Commissioner of Commercial Tax in a Circular dated February 3, 2014, which clearly mandates that a personal hearing must be given to the dealer, irrespective of whether they opted for it. The Court also relied on the Division Bench judgment in G.V.Cotton Mills (P) Ltd., which reiterated the importance of providing a personal hearing. Since this mandatory procedural requirement was not met, the impugned orders were deemed to be in violation of the principles of natural justice. Consequently, the Court set aside the impugned orders. The matter was remanded back to the respondent for fresh consideration, specifically concerning the confirmed proposals, with a direction to pass orders within one month after affording an opportunity of personal hearing to the petitioner.

Facts

The petitioner, Tvl.Fairdeal Enterprises, a registered dealer under the TNVAT Act, 2006, engaged in selling electronic appliances, filed multiple writ petitions challenging assessment orders issued by the Commercial Tax Officer. These orders, dated April 27, 2018, and May 12, 2018, pertained to the assessment years 2007-08 through 2016-17. The assessment orders were passed following a surprise inspection on September 19, 2016, and revision notices issued on December 21, 2017. The petitioner had submitted replies to these notices. While the Assessing Officer dropped some proposals, others were confirmed, including those related to other income, purchase turnover differences, returns, sales returns, purchase returns, CP movement, and purchases from RC-cancelled dealers, along with penalties. The petitioner contended that the orders were arbitrary, illegal, and violative of natural justice, specifically citing the lack of a personal hearing.

Key Issues

1. Whether the assessment orders passed by the respondent are liable to be quashed for violating the principles of natural justice by failing to afford a personal hearing to the petitioner, as mandated by the TNVAT Act, 2006, and relevant circulars and judicial precedents? The petitioner argued that the assessment orders were illegal and arbitrary because the respondent authority failed to provide an opportunity for a personal hearing, which is a mandatory procedural requirement. They relied on a Circular dated February 3, 2014, issued by the Commissioner of Commercial Tax, which emphasizes the necessity of affording personal hearings irrespective of whether the dealer opted for it. The petitioner also cited a Division Bench judgment of the Madras High Court in W.A.(MD) No.234 to 240 of 2015 (G.V.Cotton Mills (P) Ltd. vs. The Assistant Commissioner (CT)), which held that denying a personal hearing is impermissible. The respondent, represented by the Government Advocate, did not present any arguments against the petitioner's contention regarding the lack of personal hearing.