Tvl.Astoria Hotels vs. The Assistant Commissioner
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The petitioner, Tvl. Astoria Hotels, filed two writ petitions challenging assessment orders for the years 2013-14 and 2014-15. The hotel was inspected by Enforcement Wing Officials on August 31, 2015, revealing discrepancies. The respondent, the Assistant Commissioner (ST), issued pre-revision notices on March 16, 2018. The petitioner submitted objections on March 29, 2018. Subsequently, the respondent passed impugned orders on April 6, 2018, applying Circular No. 28/15 dated August 4, 2015, concerning estimated occupancy. The petitioner contended that the circular was mechanically applied without specific findings on suppression and that no separate personal hearing notice was issued after their objections were filed. The respondent sought dismissal, citing the alternative remedy of appeal.
Held
The Court held that the second contention of the petitioner, regarding the denial of a separate personal hearing notice, had particular merit. The Court found that it was not the case of the respondent that the impugned orders were passed after granting an opportunity of personal hearing. Merely offering the assessee an opportunity for personal hearing in the pre-revision notice was deemed insufficient. The Court emphasized that after objections are submitted, the authority is obliged to issue a personal hearing notice, irrespective of whether objections were filed. The Court relied on the decision in G.V. Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT) and Swami Devi Dayal Hospital and Dental College v. Union of India, which affirmed the necessity of a personal hearing even in the absence of a specific statutory provision, unless expressly excluded. Consequently, the impugned orders were quashed on this ground. The Court did not expressly decide the first issue regarding the application of the circular.
Key Issues
1. Whether the respondent could mechanically invoke Circular No. 28/15 dated August 4, 2015, to determine occupancy without arriving at a specific finding of suppression, despite the petitioner producing relevant account books? 2. Whether the respondent violated principles of natural justice by failing to issue a separate personal hearing notice after the petitioner submitted objections to the pre-revision notices? Petitioner's arguments: The petitioner argued that the respondent erred in mechanically applying the circular without establishing suppression and that the denial of a separate personal hearing notice after objections were filed was a violation of natural justice. They relied on the principle that a personal hearing is mandatory unless specifically excluded by statute. Revenue's arguments: The respondent argued that the writ petitions should be dismissed on the ground of the petitioner's failure to avail the alternative remedy of appeal. The respondent also sought to sustain the impugned orders based on the averments in their counter affidavit.
Sections Cited
Circular No. 28/15
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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 Tvl.Astoria Hotels has filed these two writ petitions for the assessment years 2013-14 and 2014-15. The petitioner had registered themselves with the respondent as an assessee. Their assessment for the said years got concluded under deemed assessment basis. The petitioner's lodging house was inspected by the Enforcement Wing Officials on 31.08.2015. Certain discrepancies were noticed. Based on the same, the respondent issued pre-revision notices dated 16.03.2018. The petitioner offered their objections vide order dated 29.03.2018. Thereafter, the impugned orders dated 06.04.2018 came to be passed by applying the Circular No.28/15, dated 04.08.2015 issued by the Principal Commissioner /Commissioner of Commercial Taxes as regards the estimated number of occupancy for one year. The said orders are assailed in this writ petitions. 1/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.13242 & 13243 of 2018 3.The respondent has filed counter affidavit seeking to sustain the impugned orders. The learned Government Advocate took me through the averments set out therein and wanted me to dismiss the writ petitions on the ground of non availing of alternative remedy of appeal. 4.I carefully considered the rival contentions and went through the materials on record. 5.The primary contention of the petitioner's counsel is that when the petitioner had produced all the relevant account books, without arriving at a specific finding as regards the suppression, the respondent could not have mechanically invoked the aforesaid circular dated 04.08.2015 to determine the occupancy of the lodging houses for one year. He would also point out that after the objections were submitted by the petitioner, no separate personal hearing notice was given to the petitioner. 6.Though I find both the contentions to be persuasive, I find particular merit in the second contention. It is not the case of the respondent that the impugned orders were passed after granting an opportunity of personal hearing to the petitioner. Mere offer to the assessee to avail personal hearing in the pre-revision notice is clearly not sufficient. The question of issuing personal hearing notice will arise after the time for lodging the objections have elapsed and whether the petitioner has given his objections or not, the authority is obliged to issue personal hearing notice. 7.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. 2/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.13242 & 13243 of 2018 8.On this ground, the orders impugned in the writ petitions are quashed. The 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 petitions are closed. Assistant Registrar (P&A) //// / /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 The Assistant Commissioner (ST), West Veli Street Circle, Madurai. +1 CC to M/s.S.KARUNAKAR, Advocate ( SR-10451[F] dated 11/03/2021 ) W.P.(MD)Nos.13242 & 13243 of 2018 and W.M.P.(MD)Nos.12077 & 12078 of 2018 10.03.2021
SGS(CO) KB(27.04.2021) 3P 3C
3/3 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.