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2016 (1) TMI 330 - HC - VAT and Sales TaxImposition of penalty - Section 27(3) - Violation of principle of natural justice - Held that - Additional Government Pleader (Taxes) after verifying the concerned file, by producing the same before this Court submitted that no pre-assessment notice was served before passing the impugned orders. The learned Additional Government Pleader (Taxes) also fairly submitted that the respondent may be directed to issue fresh notices and on receipt of the same, the petitioner may be directed to file their objections and on receipt of the same, the respondent may be directed to consider the objections and pass appropriate orders within a time frame. - violation of principles of natural justice is proved, the impugned orders dated 27.02.2015 cannot be sustained - Decided in favour of assessee.
Issues:
Challenging orders issued by the respondent in TIN No. 33720961499/2007-08 to 2010-2011 for construction activities. Lack of proper service of notices and impugned orders. Alleged violation of principles of natural justice. Analysis: The writ petitions were filed challenging the orders issued by the respondent in TIN No. 33720961499/2007-08 to 2010-2011 for construction activities undertaken by the petitioner. The petitioner, a registered dealer, engaged in construction activities and paid taxes on materials purchased from taxable dealers. The petitioner notified the Enforcement Wing about the closure of their principal place of business at Adayar and the continuation of operations at Kolathur. However, the respondent issued notices proposing to revise assessments and levy penalties based on alleged defects pointed out by Enforcement Wing Officers, without proper service of notices as per VAT Rules, 2007. The impugned orders were communicated to the principal place of business, which was closed, instead of the current branch office, leading to a lack of proper service. The main contention raised by the petitioner was the absence of proper service of notices and impugned orders, violating principles of natural justice. The respondent initiated recovery proceedings by attaching the petitioner's bank accounts without serving proper notices, further highlighting the procedural irregularities. The assessment orders for the relevant years were passed without serving pre-assessment notices, indicating a clear violation of natural justice principles. The learned Additional Government Pleader (Taxes) acknowledged the lack of pre-assessment notice and agreed to issue fresh notices for the petitioner to file objections, emphasizing the importance of due process and fair opportunity for the petitioner to present their case. Considering the proven violation of principles of natural justice, the High Court held that the impugned orders dated 27.02.2015 could not be sustained. The Court quashed the impugned orders and remitted the matters back to the respondent for fresh consideration. The respondent was directed to issue fresh notices within two weeks, allowing the petitioner to submit objections with documentary evidence within two weeks thereafter. Subsequently, the respondent was instructed to consider the objections and pass appropriate orders within four weeks, ensuring compliance with the law and providing a fair opportunity to the petitioner. The writ petitions were disposed of with these directions, emphasizing the importance of upholding procedural fairness and adherence to legal requirements in tax assessment proceedings.
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