M/S.Annai Agencies vs. The Appellate Deputy Commissioner(St)
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The petitioner, M/s. Annai Agencies, filed two writ petitions challenging proceedings passed by the State Tax Officer (Main), Tuticorin. The impugned orders pertained to the tax periods 2014-15 and 2015-16. The petitioner contended that the orders were passed without affording an opportunity of personal hearing, thus violating the principles of natural justice. The petitioner specifically raised this ground in their affidavit. The respondents did not controvert this assertion. The petitioner sought to quash the orders dated 07.12.2017 and 13.12.2017 and requested a fresh assessment after a personal hearing.
Held
The Court held that the impugned assessment orders were liable to be quashed for the failure to afford an opportunity of personal hearing to the petitioner. The Court noted that the petitioner had specifically raised this ground in their affidavit, and the respondents had not controverted it. Citing the Division Bench judgment of the Madras High Court in G.V.Cotton Mills (P) Ltd. v. The Assistant Commissioner(CT), the Court reiterated that denial of personal hearing vitiates the assessment orders. The Court emphasized that even if objections are not filed to pre-assessment notices, the assessing authority must still post the matter for hearing by issuing a notice. The ratio decidendi is that failure to provide a personal hearing, even when not explicitly mandated by a specific provision, violates the principles of natural justice and renders the order void. Consequently, the impugned orders were quashed, and the matter was remitted to the second respondent for fresh assessment, with a direction to provide the petitioner an opportunity of personal hearing.
Key Issues
1. Whether the impugned assessment orders passed by the State Tax Officer are liable to be quashed for gross violation of the principles of natural justice, specifically the failure to provide an opportunity of personal hearing, as contemplated under Section 27 of the Tamil Nadu Value Added Tax, 2006? The petitioner argued that the assessment orders were passed "straightaway" without granting an opportunity of personal hearing, which is a fundamental violation of natural justice. They relied on the Division Bench judgment of this High Court in M/s.SRC Projects Private Limited Vs. The Commissioner of Commercial Taxes and another, and the Supreme Court's observation in Swami Devi Dayal Hospital and Dental College v. Union of India that hearing is required even in the absence of a specific statutory provision, unless expressly excluded. The respondents, represented by the Special Government Pleader, argued for confirmation of the impugned orders but did not controvert the petitioner's specific plea regarding the denial of personal hearing. They did not present any counter-argument to the petitioner's submissions on this point.
Sections Cited
Section 27
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Before: and
Heard the learned counsel for the petitioner and the learned Special Government Pleaders for the respondents. 2.The petitioners are two in number. But the petitioner in both is one and the same. The assessment years pertain to the years 2014-15 and 2015-16. The impugned orders are liable to be quashed for the simple reason that opportunity of personal hearing was not afforded before passing the same. In ground No.E, the petitioner had specifically pleaded that the second respondent has straightaway passed the impugned order under Section 27 of the Tamil Nadu Value Added Tax, 2006 without granting opportunity of personal hearing and thereby violated the principles of natural justice. 3.Even though such a ground has been taken in the affidavit filed in support of the writ petition, the respondents have not controverted the stand taken by the petitioner. Though the learned Special Government Pleader called upon this Court to confirm the orders impugned in the writ petitions, as rightly pointed out by the learned counsel appearing for the petitioner, failure to give opportunity of personal hearing vitiates the impugned orders. 4.The issue is no longer res integra. The Hon'ble Division Bench of the 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 aforesaid ratio clearly applies to the case on hand. In this view of the matter, the orders impugned in these writ petitions 2/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.23873 & 23877 of 2019 are quashed. These writ petitions are allowed. The matter is remitted to the file of the second respondent. The petitioner is given two more weeks from the date of receipt of copy of this order to offer his explanation/objection along with supporting documents. If the second respondent is not satisfied with the same, it is open to him to proceed in accordance with law. In that event, the second respondent has to necessarily afford an opportunity of personal hearing and pass orders afresh in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed. Assistant Registrar(CO)
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/ /2021 Sub Assistant Registrar skm 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 Appellate Deputy Commissioner (ST), Commercial Taxes Building, Reserve line road, Palayamkottai, Tirunelveli. 2.The State Tax Officer (Main), Tuticorin-III Assessment Circle, Tuticorin. +2cc to Mr.Srinivasan, Advocate Sr.No.7094 +1cc to Special Government Pleader, Sr.No.6982 W.P.(MD)Nos.23873 & 23877 of 2019 and WMP(MD)Nos.20495 & 20498 of 2019 23.02.2021 NR (05/03/2021) 3P: 6C 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.