2008 (10) TMI 610 - HC - VAT and Sales Tax

Non sufficient opportunity given to the petitioner to produce all the documents - Held that - A perusal of the impugned order dated March 26 2008 would show that the respondent-Department has not adverted to the correct facts and referred to the documents furnished by the petitioner as well as the State buyer J.K. Paper Mills Limited Orissa properly. Further the subsequent request made by the petitioner for granting personal hearing to them and to their advocate were also not considered by the respondent. Therefore the order passed by the respondent without considering these aspects cannot stand the scrutiny of law and as submitted by the learned Senior Counsel the opportunity of personal hearing has not been given to the petitioner. Hence the impugned order is liable to be set aside

Summary

Issues:
1. Quashing of assessment orders and demand for tax payment.
2. Non-provision of Enforcement Wing Report and personal hearing.
3. Alleged discrepancies in assessment and demand for penalty.
4. Legal validity of the orders passed by the respondent.
5. Opportunity of personal hearing and submission of required documents.

Analysis:
1. The petitioner, a registered dealer under the Tamil Nadu General Sales Tax Act, challenged the pre-revision notices issued by the respondent proposing assessment of alleged escaped turnover of sales. The respondent demanded a significant amount of tax and penalties based on the Enforcement Wing Report without providing a copy to the petitioner. The petitioner contended that the sales were properly taxed in previous orders, and all necessary documents were submitted to the authorities.

2. The petitioner argued that despite furnishing all required details and documents, the respondent passed orders without considering the submissions and without providing an opportunity for a personal hearing. The petitioner and the buyer from Orissa confirmed that transport charges were not included in the sale price, which was also communicated to the respondent. The petitioner requested a personal hearing, which was not granted by the respondent.

3. The learned Senior Counsel representing the petitioner contended that the orders passed by the respondent were illegal and contrary to established principles. Referring to relevant case law, the Senior Counsel highlighted the importance of affording a personal hearing before passing such orders. The Government Advocate for the Tax Department, however, argued that the orders were valid as the petitioner had been given ample opportunity to produce necessary documents.

4. The court, after reviewing the facts and submissions, found that the respondent did not properly consider the documents submitted by the petitioner and the buyer. The court noted that the request for a personal hearing was ignored by the respondent, which rendered the orders unsustainable in law. Citing precedents, the court emphasized the necessity of providing a personal hearing before finalizing such assessments.

5. Consequently, the court set aside the impugned orders dated March 26, 2008, and directed the Department to reconsider the matter after affording the petitioner a personal hearing and allowing the submission of all required documents within a specified timeframe. The court emphasized the importance of following due process and granting a fair opportunity for the petitioner to present their case before making any final decisions.