M/S.Sashwath Constructions vs. The Commercial Tax Officer
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The petitioner, M/s. Sashwath Constructions (P) Ltd., filed two writ petitions before the Madurai Bench of the Madras High Court challenging assessment orders dated 10.05.2017 and 08.05.2017 passed by the Commercial Tax Officer, Madurai Rural (South) Assessment Circle. These orders pertained to the assessment years 2007-08 and 2008-09. The petitioner's business premises were inspected by Enforcement Wing Officials on 29.07.2015 and 04.05.2016, leading to the issuance of pre-revision notices on 30.01.2017. The petitioner contended that the impugned orders were passed without affording them an opportunity of personal hearing, violating principles of natural justice.
Held
The Court held that the assessment orders passed by the respondent authority were liable to be quashed for violating the principles of natural justice by denying the petitioner an opportunity for personal hearing. The Court relied on the Division Bench judgment of the Madras High Court in G.V. Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT), Avarayampalayam Assessment Circle, Coimbatore, which clearly stated that failure to submit objections to pre-assessment notices does not entitle the assessment officer to deny an opportunity of personal hearing. The Court also referred to the Supreme Court's decision in Swami Devi Dayal Hospital and Dental College v. Union of India, emphasizing the requirement of a hearing unless statutorily excluded. The respondent authority, present before the Court, agreed to grant a personal hearing to the petitioner on 24.03.2021. Consequently, the impugned orders were quashed, and the matter was remitted to the respondent for passing fresh assessment orders after affording the petitioner an opportunity of being heard. The Court directed the petitioner to appear on the specified date with relevant records and cautioned against delaying tactics.
Key Issues
1. Whether the assessment orders passed by the respondent authority are liable to be quashed for violation of the principles of natural justice, specifically the denial of an opportunity for personal hearing, contrary to the provisions of the relevant tax statutes and established legal precedents? The petitioner argued that the respondent authority passed the impugned assessment orders without providing an opportunity for a personal hearing, which is a fundamental principle of natural justice. They relied on the decision of the Madras High Court in G.V. Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT), Avarayampalayam Assessment Circle, Coimbatore, which held that denial of personal hearing is impermissible even if no objection was filed against pre-assessment notices. The petitioner also cited the Supreme Court's observation in Swami Devi Dayal Hospital and Dental College v. Union of India that a hearing is required unless specifically excluded by statute. The respondent, represented by the Government Advocate, initially sought to sustain the impugned orders. However, in light of the counter affidavit and the respondent officer's statement before the Court, the respondent agreed to grant a personal hearing.
Sections Cited
None explicitly mentioned in the judgment text as being the basis for the decision, other than general principles of natural justice and reliance on case law. The assessment years 2007-08 and 2008-09 are mentioned, implying pre-GST regime laws were applicable.
AI-generated summary — verify with the full judgment below
Before: and
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Heard the learned counsel on either side. 2.The petitioner is an assessee registered with the respondent. 1/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.11208 & 11209 of 2017 The petitioner's place of business was inspected by the Enforcement Wing Officials on 29.07.2015 and 04.05.2016. Certain discrepancies were noticed. Based on the report of the Enforcement Wing Officials, pre-revision notices dated 30.01.2017 were issued that was in respect of the assessment years 2007-08 & 2008-09. However, without granting an opportunity of personal hearing, the impugned orders came to be passed. They are questioned in these writ petitions. 3.Though counter affidavit has been filed and the learned Government Advocate would call upon this Court to sustain the impugned orders, in the light of the stand taken in the counter affidavit, I am of the view that the contention raised by the petitioner's counsel is rather formidable. 4.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 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. 5.The respondent authority is present before this Court through video conferencing. The officer states that she is ready to grant personal hearing to the petitioner on 24.03.2021 at 11.a.m. I make it clear that the petitioner will not receive any independent personal hearing notice. The petitioner has to appear on the said date along with the relevant records. I further make it clear that the petitioner cannot adopt any dragging on the tactics. On the said hearing date, all the materials will be placed before the respondent. It is open to the respondent to pass orders afresh in accordance with law. 6.The orders impugned in the writ petitions are quashed. The 2/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.11208 & 11209 of 2017 Writ Petitions are allowed. The matter is remitted to the file of the respondent to pass orders afresh in accordance with law. No costs. Consequently, connected miscellaneous petition is closed. Assistant Registrar (AS) //// / /2021 Sub Assistant Registrar(CS) 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 The Commercial Tax Officer, Madurai Rural (South) Assessment Circle, Commercial Taxes Buildings, Madurai-20. +1 CC to M/s.S.KARUNAKAR, Advocate ( SR-10450[F] dated 11/03/2021 ) +1 CC to M/s.SPL GP ( SR-10917[F] dated 12/03/2021 ) W.P.(MD)Nos.11208 & 11209 of 2017 and W.M.P.(MD)Nos.8598 & 8599 of 2017 11.03.2021
SSS(CO) KB(24.04.2021) 3P 4C
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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.