Tvl. Arul Timber Depot vs. The State Of Tamil Nadu
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The petitioner, Tvl. Arun Timber Depot, filed four writ petitions challenging orders passed by the Assistant Commissioner (C.T.)-I, Tuticorin, for the assessment years 2011-12, 2012-13, 2013-14, and 2015-16. These orders were passed on 15.11.2017 and 21.08.2017, following an inspection of the petitioner's business premises by the enforcement wing on 15.07.2016 and 16.07.2016. Pre-revision notices were sent to the petitioner. The petitioner's counsel contended that the notices were received by an employee, but the proprietor was hospitalized and unable to respond. As no reply was received, the proposals in the notices were confirmed. The petitioner became aware of the demands only when enforcement was sought.
Held
The Court held that the impugned orders suffered from a basic vice, namely, the failure to provide the petitioner with a personal hearing. It was not disputed that such an opportunity was not given. The Court found that the failure to provide an opportunity of hearing, even in the absence of a reply to the pre-revision notices, vitiates the impugned orders. 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), which held that failure to submit objections to pre-assessment notices does not grant the assessing officer the right to deny a personal hearing. The Supreme Court's observation in Swami Devi Dayal Hospital and Dental College v. Union of India, that a hearing is required even in the absence of a specific statutory provision, was also cited. Consequently, the orders impugned in the writ petitions were quashed. The matter was remitted to the third respondent for fresh consideration. The petitioner was granted four weeks to submit objections, and the third respondent was directed to issue a personal hearing notice and pass fresh orders. The petitioner undertook to pay Rs. 10,00,000/- within four weeks, which was recorded and made conditional to the order passed after remand.
Key Issues
1. Whether the impugned orders passed by the third respondent are liable to be quashed for failure to provide the petitioner with an opportunity of personal hearing, contrary to principles of natural justice? (Question of law). The petitioner argued that the impugned orders are vitiated by a fundamental flaw: the denial of a personal hearing. They contended that even if no objections were filed in response to the pre-revision notices, the assessing authority was still obligated to provide an opportunity for a personal hearing before passing final orders. The petitioner relied on the Division Bench judgment of the Madras High Court 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, which emphasize the necessity of a hearing. The respondents did not present any arguments against the petitioner's claim regarding the denial of personal hearing.
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Heard together (4 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
C O M M O N O R D E R Heard the learned counsel appearing for the petitioner and the learned Standing counsel appearing for the respondents.
The writ petitions are four in number. However, the petitioner in all the writ petitions are one and the same. The assessment years alone are different. The petitioner is a dealer registered with the third respondent. Following the inspection of the petitioner's business premises by the enforcement wing on 15.07.2016 and 16.07.2016, it was suggested to revise the petitioner's concluded assessment for the previous years. Pre- revision notices were sent by registered post with acknowledgement due to the petitioner's address. The petitioner's counsel would claim that the notices were received by the employee who was authorised to receive the official communications. It was also stated that the Proprietor was in hospital during the relevant time and that is why, they were unable to offer their objections. Since no reply was received, the proposals set out in the pre- revision notices were confirmed and the impugned orders were passed on 15.11.2017 and 21.08.2017. Only when the respondents came to enforce the same, the petitioner realised his precarious situation.
The petitioner's counsel fairly states that in respect of the demands set out in all the four writ petitions, the petitioner would pay a sum of Rs.10,00,000/- within a period of four weeks from the date of receipt of a copy of this order. This payment will be without prejudice to the petitioner's contentions and will abide by the orders to be passed after remand.
This undertaking to remit a sum of Rs.10,00,000/- is recorded. 2/8 https://hcservices.ecourts.gov.in/hcservices/
3 W.P.(MD)NO.7817 OF 2018
The impugned orders suffer from a basic vice. It is not in dispute that personal hearing was not given to the petitioner. Though no reply was given by the petitioner, failure to give an opportunity of hearing vitiates the impugned orders. The issue is no longer res integra. 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.“
The aforesaid ratio clearly applies to the case on hand. In this view of the matter, the orders impugned in these writ petitions are quashed. These writ petitions are allowed. The matter is remitted to the file of the third respondent. The petitioner is given four weeks time from the date of receipt of a copy of this order to offer his objections. The third respondent will go through the same. If the third respondent is not satisfied with the stand taken by the petitioner, then, the third respondent will issue personal hearing notice and pass orders afresh in accordance with law. If the petitioner does not adhere to the undertaking, the order now passed by this Court will stand automatically recalled. No costs. Consequently, connected miscellaneous petitions are closed. Assistant Registrar (CO) //// / /2021 Sub Assistant Registrar(CS ) 3/8 https://hcservices.ecourts.gov.in/hcservices/
4 W.P.(MD)NO.7817 OF 2018 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 Secretary to Government, Department of Commercial Taxes & Registration Department, Fort St. George, Chennai – 600 009. 2. The Commissioner of Commercial Taxes, 2nd Floor, Ezhilagam, Chepauk, Chennai – 600 005. 3. The Assistant Commissioner(C.T.)-I, Tuticorin.
+4 CC to Mr.MOHAMED IBRAHIM ALI, Advocate ( SR-7384[F] dated 25/02/2021 ) W.P.(MD)Nos.7817 to 7820 of 2018 25.02.2021 PMU AE/ (08/03/2021) 4P / 8C 4/8 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.