Anjappar Chettinad A/C Restaurant vs. The Asst Commissioner (St)

Facts

The petitioner, Anjappar Chettinad A/C Restaurant, filed a writ petition challenging an assessment order dated 11.11.2020 passed by the Assistant Commissioner (ST). The petitioner had reported a total turnover of Rs. 84,10,761/- for the year 2017-18 and paid VAT at 2%. The respondent, based on an audit objection, issued a notice on 23.03.2020 stating that the sale of food was liable to tax at 14.5%. Due to the COVID-19 pandemic, the petitioner's restaurant was closed until May 2020, preventing a response to the notice. Consequently, the respondent passed the impugned order without affording the petitioner an opportunity to explain their case.

Held

The Court held that the impugned assessment order dated 11.11.2020 was an ex-parte order passed without affording the petitioner a reasonable opportunity, including a personal hearing, as mandated by Section 27(4) of the Tamil Nadu Value Added Tax Act, 2006. The Court acknowledged the petitioner's submission that the pandemic situation prevented them from responding to the notice. Therefore, the Court found it necessary that the petitioner should have been given a personal hearing. The Court quashed the impugned order and remanded the matter back to the respondent for fresh consideration. The respondent was directed to provide a reasonable opportunity, including a personal hearing, and pass appropriate orders within three months. The petitioner was also directed to produce available records during the personal hearing.

Key Issues

1. Whether the assessment order dated 11.11.2020 passed by the respondent is liable to be quashed as arbitrary and illegal, considering the petitioner was not given an opportunity to explain their case, particularly in light of Section 27 of the Tamil Nadu Value Added Tax Act, 2006? Petitioner's contention: The petitioner argued that an opportunity to explain their case, including a personal hearing, is mandatory before passing an assessment order, as stipulated by Section 27 of the TNVAT Act, 2006. They relied on the decision in M/s DELPHI AUTOMATIVE SYTEMSP LTD Vs THE ASSISTANT COMMISSIONER(CT), CHENNAI. The pandemic situation prevented them from responding to the notice. Respondent's contention: The respondent contended that an appeal remedy is available to the petitioner before the Appellate Deputy Commissioner(ST), Trichy, and therefore, the writ petition is not maintainable.