M/S. J.S. Steels vs. The Assistant Commissioner
Original PDF →Facts
The petitioner, M/s.J.S.Steels, represented by its Proprietor, filed two writ petitions challenging assessment orders for the years 2012-13 and 2013-14, passed by the Assistant Commissioner (CT)-III, Dindigul. The assessments were finalized under Section 22(2) of the TNVAT Act, 2006, on a deemed assessment basis after the respondent noticed discrepancies from departmental website data. Pre-revision notices were issued, but the petitioner claims he could not submit a reply due to medical reasons. The impugned orders confirmed the proposals in the show cause notices. The respondent argued that the orders should be sustained.
Held
The Court held that the impugned orders were liable to be quashed for two primary reasons. Firstly, when the discrepancies were noticed from particulars retrieved from the departmental website, the respondent ought to have conducted an enquiry 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 the opportunity of personal hearing is mandatory, as held by a Division Bench of the Madras High Court in G.V.Cotton Mills case, which also referenced a Supreme Court observation that hearing is required unless specifically excluded by a statutory provision. Consequently, the impugned orders were quashed, and the matters were remitted to the respondent. The petitioner was granted three weeks to offer an explanation, after which the respondent would afford a personal hearing before passing fresh orders.
Key Issues
1. Whether the respondent authority failed to follow mandatory procedural requirements before passing the impugned assessment orders, specifically concerning the opportunity of personal hearing and conducting an enquiry with the other dealer, as required under the TNVAT Act, 2006? The petitioner contended that the impugned orders were illegal and contrary to the provisions of the Act, primarily due to the denial of a reasonable opportunity of being heard. They argued that the respondent ought to have conducted an enquiry with the other dealer when discrepancies were noticed from the departmental website and that personal hearing was not granted. The petitioner relied on the principle that affording personal hearing is mandatory, even if the assessee fails to respond to pre-revision notices, citing the Division Bench judgment in G.V.Cotton Mills case and a Supreme Court observation in Swami Devi Dayal Hospital and Dental College v. Union of India. The respondent argued that the impugned orders should be sustained and referred to contentions in their counter affidavit.
Sections Cited
Section 22(2)
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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 in both the writ petitions is one and the same. The assessment years are 2012-13 and 2013-14. The petitioner is a dealer registered with the respondent. His assessment for both the years were finalised under Section 22(2) of the TNVAT Act, 2006, on deemed assessment basis on verification of the dealings retrieved from the departmental website. The respondent noticed certain 1/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)Nos.19964 and 19965 of 2014 discrepancies. Based on the same, pre-revision notices were issued. Due to medical reasons, the petitioner states that he could not submit his reply. The impugned orders came to be passed confirming the proposals set out in the show cause notice. They are under challenge in these writ petitions. 3.The respondents have filed a counter affidavits 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 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.19964 and 19965 of 2014 6.For the aforesaid reasons, the impugned orders are quashed. The Writ Petitions are allowed. The matters are remitted to the file of the 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 respondent is not satisfied even thereafter, the 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 The Assistant Commissioner (CT)-III, Commercial Taxes Buildings, Dindigul. +1 CC to Mr.S.KARUNAKAR, Advocate ( SR-6061[F] dated 19/02/2021 ) +1 CC to SPL GP ( SR-6175[F] dated 19/02/2021 ) W.P.(MD)Nos.19964 and 19965 of 2014 and M.P.(MD)Nos.1,1 & 1 of 2014 18/02/2021 VB (03.03.2021) 3P 4C 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.