Tvl. Yousuf & Co vs. The State Of Tamil Nadu

Held

The Court held that the service of notice on the petitioner's legal practitioner, who had received it and later admitted to forgetting to communicate it, was effectively served on the dealer as per Rule 19(1)(b) of the Tamil Nadu Value Added Tax Rules, 2007. However, the Court found merit in the petitioner's contention regarding the inclusion of additional proposals in the final assessment order. The Assessing Officer had initially proposed 11 items in the notice dated 22.06.2015 but added more than 4 additional proposals in the final order dated 25.09.2015, levying penalty on these un-proposed items. Citing the precedent in *Intek Engineers v. Assistant Commissioner (CT)(Mad)*, the Court held that adding new grounds for assessment without proper proposal and opportunity to object goes to the root of the matter and vitiates the assessment order. Therefore, the impugned order was set aside and the matter was remanded for fresh consideration, subject to the petitioner depositing Rs.10,00,000/- and producing relevant records.

Facts

The petitioner, Tvl. Yousuf & Co., a dealer of hides and skins, filed a writ petition challenging the assessment order dated 25.09.2015 passed by the Assistant Commissioner (CT)-III, Dindigul. The petitioner had filed returns for the assessment year 2013-2014, reporting a total turnover of Rs.7,64,56,501/- and taxable turnover of Rs.5,70,53,444/-, after adjusting input tax credit. A deemed assessment was passed on 31.10.2014. Subsequently, the impugned notice dated 25.09.2015 was issued, referencing a prior notice dated 22.06.2015 which the petitioner claimed was not properly served. The petitioner contended that the final order included new proposals not mentioned in the earlier notice, violating principles of natural justice.

Key Issues

1. Whether the service of notice dated 22.06.2015 on the petitioner's authorized accountant, who subsequently forgot to communicate it to the petitioner, constitutes effective service under Rule 19(1)(b) of the Tamil Nadu Value Added Tax Rules, 2007? The petitioner argued that the notice was not effectively served, leading to a violation of natural justice. The respondents contended that service on the legal practitioner or authorized representative is valid as per Rule 19(1)(b), and therefore, the service was proper. 2. Whether the Assessing Officer erred by including additional proposals in the final assessment order dated 25.09.2015 that were not included in the notice dated 22.06.2015? The petitioner argued that this inclusion of new proposals without prior notice violated principles of natural justice. The respondents admitted that some proposals were left out of the initial notice due to the necessity of reply but were included in the final order after perusing available records and for audit purposes.