TMI Blog2014 (6) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the period the said Act or 1970 Act, as the case may be was in force notwithstanding the repeal of the said Act or 1970 Act as the case may be. Therefore, even the Circular issued by the Commissioner will be applicable in this case. Thus, Section 16 (1) is in para materia of Section 27 of TNVAT Act. Even if the argument advanced on behalf of the respondents is accepted that personal hearing need not be given, when such an opportunity of hearing is specifically sought, it has to be extended to the petiitoner. The quasi judicial powers conferred on the assessing officer has to be exercised in a judicious, fair and objective manner without arbitrariness and subject to the rules of natural justice, including grant of personal hearing and recording of reasons for conclusions ultimately arrived at before rejection of an application for exemption or waiver or stay and the non-adherence to the aforesaid principle will offend Article 14 of the Constitution of India and also renders the very remedy available to the assessee a nugatory. Whether it is application of Section 22 (2) or 27 (1) of the Act, the petitioner ought to have granted an opportunity of personal hearing, when he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and inter-related, the petitioner in all the writ petitions as well as the respondents are one and the same, besides common arguments have been advanced by counsel for both sides, by consent of counsel for both sides, the writ petitions are taken up together for hearing and are disposed of by this common order. 2. WP No. 9077 to 9079 of 2014 have been filed by the petitoiner challenging the validity of the orders of assessment dated 28.02.2014 for the assessment years 2009-2010, 2010-2011 and 2011-2012 respectively, while WP Nos. 9725 to 9727 of 2014 have been filed praying for a Writ of Mandamus directing the second respondent to hear and decide the appeals filed by the petitioner without insisting on the condition of pre-deposit of any part of the demand confirmed by the first respondent or furnishing of any security and without in any manner seeking to enforce the notice of demand issued by the first respondent dated 28.02.2014 for the assessment years 2009-2010, 2010-2011 and 2011-2012 respectively. 3. For the purpose of disposal of these writ petitions, first let me deal with the WP Nos. 9077 to 9079 and if they are decided, it will also cover the disposal of the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afford an opportunity of personal hearing before passing any adverse order against them. The petitioner also, along with the objections dated 13.02.2014, filed sample documents such as invoice, shipping bill and packing list. On 27.02.2014, it is stated that the petitioner company was called upon by the first respondent to produce the copy of the export register for the assessment years 2009-2010, 2010-2011 and 2011-20-12. While so, on 28.02.2014, without taking note of the objections raised by the petitioner or without even giving an opportunity of personal hearing, the impugned orders have been passed by the first respondent in respect of the three assessment years. However, the fact that the first respondent has passed the orders dated 28.02.2014 came to be known to the petitioner company only when the representative of the petitioner company went to the office of the first respondent to submit certain documents. In the order dated 28.02.2014, the first respondent has indicated that already more than two months time was given to the dealer from the date of original notice viz., 22.12.2013 and after giving sufficient time, again another notice dated 24.01.2014 was issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of audit, the entire records relating to the period from 01.01.2007 to 31.03.2012 were scrutinised and whatever queries raised during the course of audit have been answered by the petitioner. In the normal circumstances, the assessment is deemed to have taken place during October itself, but the assessment is deemed to take effect only on production of document or the assessment is complete on proof of payment of tax. In this case, the first respondent would contend that the petitioner has not produced any documentary proof to substantiate their claim, while so, the assessment is not complete as contemplated under Section 22 (2) of the TNVAT Act. As contemplated under Section 22 (4) of TNVAT Act, the petitioner should have been given an opportunity of personal hearing and only thereafter, the assessment order has to be passed. If it is escaped assessment, Section 27 of the TNVAT Act can be invoked and even in that case, an opportunity of hearing is mandatory. 8. The learned senior counsel for the petitioner relied on the Division Bench decision of this Court in the case of (Tvl.SRC Projects Private Limited, rep. By its Chief Executive Officer, Salem vs. Commissioner of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and prescribed documents, the assessment orders are deemed to have been passed on 30th October of succeeding year. Therefore, for the assessment year 2006-2007 to 2010-2011, assessment orders are already passed prior to that date and the date of deemed assessment shall be 30.06.2012. Therefore, effective 19.06.2012, if no return is filed or the return is incorrect or incomplete or it is not accompanied by proof of payment of tax or documents required thereon, the assessing officer shall assess and pass a best of judgment and it can be passed after affording an opportunity of hearing. Further, as required under Section 22 (4) of TNVAT Act, the petitioner company failed to file their return or paid the tax under the CST Act but claimed certain exemptions on export transaction, stock transfer etc., against 'F' Forms and concessional levies against 'C' forms. Under Section 6A of CST Act, in relation to stock transfers, form ' F' declaration are prescribed documents and in relation to inter state sales at concessional tax rate under Section 8 (1) of the said Act, form C declaration are the prescribed documents and are required to be filed along with the mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terstate sales, the exemption claim on stock transfer not covered by form F and the concessional tax claim on CST sales not covered by form C was also to be disallowed and assessed at a higher rate of tax as against the exemption/ tax rate allowed in the deemed original order of assessment. Therefore, in such circumstances, the only recourse is revision under Section 27 (1) (b). Accordingly, the notices dated 21.08.2012 in respect of assessment years 2009-2010 and 23.12.2013 in respect of 2011-2012 were issued for revision under Section 27 of TNVAT Act read with Sec. 9 (2) of CST Act. Therefore, according to the learned Advocate General, the assessment was made under Section 27 (1) (a) of the Act and no original order of assessment based on returns was passed upto 30.06.2012 and by virtue of the amendment made to Section 22 (2) from 19.06.2012, the assessment for the assessment year 2010-2011 was deemed to have been finalised on 30.06.2012. However, as an abundant caution, another notice dated 24.01.2014 was issued for all the assessment years in compliance with principles of natural justice calling upon the petitioner to produce the documents. 15. The learned Advocate General s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him at every stage. From the year 2011, notices have been issued to the petitioner and opportunity was afforded at every level. Therefore, it cannot be said that the impugned orders are in violation of the principles of natural justice when the petitioner was given adequate and reasonable opportunity. 17. By way of reply to the submissions of the learned Advocate General, the learned senior counsel for the petitioner would point out that even according to the respondents, the first notice was issued on 12.10.2011, which is as per the mandate provided under Section 22 (2) of the Act, however, the respondents did not comply with the provisions of Section 22 (4) of the Act which was also accepted by them by stating that an opportunity of personal hearing was not afforded to the petitioner. 18. I heard the learned senior counsel for the petitioner and the learned Advocate General appearing for the respondents. The counsel for both sides did not vehemently argue regarding the alternative prayer to grant permission to the petitioner to file an appeal without insisting on the mandatory deposit, as sought for by the petitioner in WP Nos. 9725, 9726 and 9727 of 2014. According to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated under Section 8 (2) of the CST Act. 21. For the assessment order relating to the year 2010-2011, in respect of export sale, it was indicated that even after issuing notice on 12.11.2011, the dealer has not taken steps to file copies of documents in respect of claim for exemption. The officer has stated that filing of sample documents for claim of exemption for a huge turnover of Rs.13920,49,14,632/- is not acceptable. According to the first respondent, the dealer has not even given the detailed list as to when the goods were exported, to whom it was exported, the number and date of bill of lading etc., which would prove that the dealer is not having sufficient proof in support of claim of exemption. The order also further states that even though letter dated 12.02.2014 was given by the petitioner seeking opportunity of personal hearing before passing any order adverse to them, it was stated that as the original notice was issued as early as on 12.10.2011 and after giving sufficient time another notice was also issued on 24.01.2014, the dealer has not utilised those opportunities given. It was also clearly stated that the submissions of document as proof of exemption alone w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the three assessment years, the assessing officer, at his whims and fancy, culled out the transactions that took place during January 2013 and arrived at the tax amount. The assessment officer, instead, could have very well inspected the documents at the place of business of the petitioner company or atleast a personal opportunity of hearing could have been given as pleaded by the petitioner so as to enable the petitioner to produce the voluminious documents. 25. It is seen from the materials placed on record that an audit was conducted in the business premises of the petitioner company from January 2013 to February 2013 for about 10 days, during which time, all the documents were made available by the petitioner. Nothing prevented the first respondent or his officiers from demanding for production of copies of documents to satisfy themselves as to whether the petitioner had made export sale or not. In the impugned orders of assessment, no explanation has been given by the first respondent in so far as it relates to money received by sale of goods to foreign countries. All these things could have been averted by the first respondent if a personal hearing is given during which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on the 30th day of June 2012. 28. In this case, as stated by both sides, cerain documents were produced by the petitioner and certain documents have not been produced as per the statement of the respondents. The petitioner also not paid tax as there is a dispute as to whether at all tax is payable by them inasmuch as they claim exemption for export sale. Further, original notice emanated from the respondents even during the year 2011 itself before amendment. Therefore, according to the learned senior counsel for the petitioner, when the then prevailing Section 22 (4) of the Act mandatorily provides for affording a personal hearing or in the alternative, since the respondents contend that the petitioner did not furnish the relevant document, there cannot be a deemed assessment. Therefore also, the provisions contemplated under Sections 22 (2) and 22 (4) have to be mandatorily followed by the respondents by giving a personal hearing, which was not done in this case. In such event, the orders of assessments, as passed by the first respondent, are liable to be set aside. It is further stated that if it is a re-assessment, as contended by the respondents, taking into considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposes to consider a few authorities on the content of the expression 'reasonable opportunity to show cause'. It may be true if the provision of reasonable opportunity to show cause is considered bereft of the circular, then it may not be held that it includes an opportunity of personal hearing. But then in a case where the question involved is one of determination of certain factual disputes, which are a bit complex and not free from controversy, the Court has to consider whether principles of fairness would encompass personal hearing within. .....The Court therefore holds that the provision of Section 16 (1) (a) of the said Act has to be construed in accordance with the said circular which is by way of contemporanea expositi. So when a specific demand is made for personal hearing the reasonable opportunity of showing cause should include the same in the interest of fairness in procedure. ....It is well settted that existence of an alternative remedy does not oust the jurisdiction of a writ court under the article 226 of the Constitution. Such jurisdiction is plenary in nature. But the existence of alternative remedy operates as an automatic restrain on the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es) reported in (2012) (12) TMI 851, which arise out of an identical situation, this Court held that before passing an order under Section 27 (1) (a) of the TNVAT Act held that personal hearing is a must before imposition of penalty, whether or not statute or statutory provisions/rules provides for it, as otherwise it would violate Article 14 of the Constitution. In that case, this Court relied on the decision of the Honourable Supreme Court in the case of (Kesar Enterprises Limited vs. State of Uttar Pradesh) 2011 13 SCC 733 wherein, the Honourable Supreme Court, relying on yet another decision in Sahara India vs. CIT, 2008 14 SCC 151 held that in the absence of a provision in the Income Tax Act, 1961, an opportunity of hearing was required to be given to an assessee before an order under Section 142 (2-A) Act directing special audit of his accounts was passed. It was further held that the it is trite that unless a statutory provision either specifically or by necessary implication excludes the application of principles of natural justice, because in that event the Court would not ignore the legislative mandate, the requirement of giving personal opportunity of being heard before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has to be applied or not is to be considered bearing in mind the express language and the basic scheme of the provision conferring the power; the nature of the power conferred and the purpose for which the power is conferred and the final effect of the exercise of that power. It is only upon a consideration of all these matters that the question of application of the said principle can be properly determined. 36. As per Section 88 (3) (i) of the TNVAT Act, which deals with repeal and saving, it was provided that the amendment or repeal shall not affect the previous operation of the said Act or 1970 Act, as the case may be, or any right, privilege, obligation or liability already acquired, accrued or incurred thereunder and subject thereto, anything done or any action taken including any appointment made, any notification, notice or order issued, any rule or regulation framed or forms prescribed and any certificate, licence, or permit granted in exercise of any power conferred by or under the said Act or 1970 Act, as the case may be, shall be valid and always as deemed to have been valid, during the period the said Act or 1970 Act, as the case may be was in force notwithstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, for one reason or the other, the assessee has taken time to produce the relevant documents. In such circumstances, the assessing officer thought it fit that a personal hearing is not necessary and the documents already on record are sufficient to pass an assessment order. The fore, the learned Advocate General would submit that such a discretion exercised by the assessing officer need not be interfered with by this Honourable Court. This decision was distinguished by the learned senior counsel for the petitioner by contending that the decision in that case related to whether affording a personal hearing was necessary before disposal of an application by the appellate authority for pre-deposit under the Import and Exports (Control) Act, 1947 and it does not relate to passing of final assessment order. In fact, that decision was distinguished by this Court in the decision reported in (ITC Limited case 2001 127 ELT 338 (Madras) wherein it was held that the judgment of the Apex Court has to be confined to facts of that case and nowhere the Apex Court in that case has ruled that principles of natural justice or audi alter partem will have no application in respect of an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioner for perusal of such volumnious documents. The non-consideration of the same vitiates the impugned orders. 43. In the result, the orders which are impugned in WP Nos. 9077 to 9079 of 2014 are set aside. WP Nos. 9077 to 9079 of 2014 are allowed. In view of the order passed in WP Nos. 9077 to 9079 of 2014, no order is required to be passed in WP Nos. 9725 to 9727 of 2014 and they are accordingly dismissed. No costs. Consequently, connected miscellaneous petitions are closed. The matter is remanded back to the first respondent for fresh consideration. The first respondent is directed to afford an opportunity of personal hearing to the petitioner, peruse the documents that may be produced by the petitioner and then pass orders on merits and in accordance with law. 44. Even though the impugned orders are quashed, this Court, taking into consideration the demand notices issued by the first respondent are still valid, the effect of quashing the assessment orders will not totally take away the right of the first respondent to proceed further in the matter. Further, taking note of the fact that the transaction reported by the petitioner is huge, pertaining to foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X
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