Tvl.Saravana Furniture vs. The Commissioner Of Commercial Taxes
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The writ petitioner, Tvl.Saravana Furniture, filed three writ petitions challenging orders passed by the Assistant Commissioner (ST), Sivagangai Assessment Circle. These orders pertained to the tax periods 2013-14, 2014-15, and 2015-16. The petitioner's assessments, initially concluded on a deemed assessment basis under Section 22(2) of the TNVAT Act, were sought to be reopened by the revenue. The reopening was based on discrepancies noticed on the departmental website. The Assistant Commissioner issued pre-revision notices, to which the petitioner only sought adjournments and failed to provide objections. Subsequently, the impugned orders were passed, confirming the proposals in the notices.
Held
The Court held that the impugned orders were liable to be quashed for two reasons. Firstly, when discrepancies were noticed from particulars retrieved from the departmental website, the respondent ought to have conducted an inquiry with the other dealer, which procedure was not adopted. Secondly, personal hearing was not granted to the petitioner. The Court emphasized that even if the assessee failed to respond to pre-revision notices, affording an opportunity of personal hearing is mandatory. The Court relied on the Division Bench judgment in G.V.Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT), which held that failure to submit objections to pre-assessment notices does not give the assessment officer a right to deny an opportunity of personal hearing. The Supreme Court in Swami Devi Dayal Hospital and Dental College v. Union of India was also cited for the proposition that hearing is required even in the absence of a specific statutory provision, unless specifically excluded. Consequently, the impugned orders were quashed, and the matters were remitted to the second respondent for fresh consideration. The petitioner was granted three weeks to offer an explanation, and if the second respondent was not satisfied, a personal hearing would be afforded before passing fresh orders.
Key Issues
1. Whether the impugned orders are liable to be quashed for failure to conduct an inquiry with the other dealer when discrepancies were noticed from the departmental website? (Question of law) 2. Whether the impugned orders are liable to be quashed for denial of personal hearing to the petitioner? (Question of law) Petitioner's Arguments: The petitioner contended that the impugned orders should be quashed on two grounds: (i) the revenue failed to conduct an inquiry with the other dealer when discrepancies were found on the departmental website, and (ii) personal hearing was not granted. The petitioner relied on the principle that an opportunity of personal hearing is mandatory, citing the Division Bench judgment in G.V.Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT) and the Supreme Court decision in Swami Devi Dayal Hospital and Dental College v. Union of India. Revenue's Arguments: The respondents (revenue) sought to sustain the impugned orders, arguing that the petitioner failed to provide objections to the pre-revision notices, and therefore, the denial of personal hearing was justified.
Sections Cited
Section 22(2)
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Cause title — parties, addresses and appearances
ORDER Heard the learned counsel on either side. 2.Tvl.Saravana Furniture is the writ petitioner in all the three writ petitions. They pertain to the assessment years 2013- 14, 2014-15 & 2015-16. The petitioner's assessment concluded under Section 22(2) of TNVAT Act on deemed assessment basis was sought to be reopened. Based on the discrepancies noticed in the departmental website, the second respondent issued pre-revision notice. The petitioner only sought adjournment. They failed to give any objections. Thereafter, the impugned orders came to be passed confirming the proposals set out in the notices. Questioning the same, this writ petitions have been filed. 3.The respondents have filed a counter affidavit and the learned Government Advocate took me through the contentions set out therein and wanted me to sustain the orders impugned in these writ petitions. 4.I carefully considered the rival contentions and went through the materials on record. The impugned orders are liable to be quashed for two reasons:- (i)When the impugned orders rest on the discrepancies noticed from the particulars retrieved from the departmental website, the respondent ought to have conducted an enquiry with the other dealer. Such procedure was not adopted. (ii) Personal hearing was not granted. 5.Even if the assessee failed to respond the pre revision notices, the Hon'ble Division Bench, in G.V.Cotton Mills case, held that affording the opportunity of personal hearing is mandatory. The Hon'ble Division Bench of Madras High Court in the decision reported in [2019] 60 GSTR 418(Mad) (G.V.Cotton Mills (P) Ltd., V. The Assistant Commissioner(CT), Avarayampalayam Assessment Circle, Coimbatore) held as follows:- “Denial of personal hearing:
The respondent denied the appellant opportunity of hearing only on the ground that objection was not given to the pre-assessment notices. Even if objection was not given, still the assessing 2/4 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.27021, 27022 & 27024 of 2019 authority was expected to post the matter for hearing by issuing notice to the assessee. In case the assessee fail to appear, it is open to the assessment authority to pass orders on merits. We make the position clear that the failure to submit objection to the pre assessment notice would not give a right to the assessment officer to deny opportunity of personal hearing to the assessee.
The Supreme Court in Swami Devi Dayal Hospital and Dental College v. Union of India MANU/SC/0873/2013 : [2013] 10 Scale 608 observed that even in the absence of a specific provision of giving hearing, the hearing is required in such cases, unless specifically excluded by a statutory provision.” 6.For the aforesaid reasons, the impugned orders are quashed. The Writ Petitions are allowed. The matters are remitted to the file of the second respondent. The petitioner is given three weeks time from the date of receipt of a copy of this order to offer his explanation. If the second respondent is not satisfied even thereafter, the second respondent will afford the opportunity of personal hearing to the petitioner and thereafter pass orders afresh in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed. Assistant Registrar () //// / /2021 Sub Assistant Registrar(CS) rmi Note :In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned. To 1.The Commissioner of Commercial Taxes, O/o, the Principal and Special Commissioner of Commercial Taxes, Ezhilagam, Chepauk, Chennai-600 005. 3/4 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.27021, 27022 & 27024 of 2019
The Assistant Commissioner (ST), Sivagangai Assessment Circle, Commercial Taxes Office, No.3, Oversupillai Street, Sivagangai-630 561. +1 CC to M/s.B.ROOBAN, Advocate ( SR-12187[F] dated 18/03/2021 ) W.P.(MD)Nos.27021, 27022 & 27024 of 2019 and W.M.P.(MD)Nos.23371, 23373 & 23375 of 2019 17.03.2021 VB (30/04/2021) 4P / 4C 4/4 https://hcservices.ecourts.gov.in/hcservices/
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.