TMI Blog2017 (9) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.05.2014, and notice was issued on 27.08.2015, without reference to any of the earlier notices or reply notices given by the petitioner. Thus, to that extent, the entire procedural formalities adopted by the respondent is flawed and amounts to violation of principles of natural justice. When the respondent had taken up the matter for adjudication, he ought to have taken into consideration what had transpired earlier and what was on their record from 2007 onwards. This Court can safely presume that the respondent was not even aware of the earlier proceedings, which were initiated in the year 2007. So far as the legal position is concerned, even it is accepted that the nature of transaction done by the petitioner amounts to deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitioner's case is that, they provide financing by way of financial and operating lease and term loans to enable business entities to obtain assets, plant and machinery, motor vehicles, computers and assets for their own use. The modus operandi adopted by the petitioner is that, the petitioner herein purchases goods like plant and machinery, motor vehicles, computers and assets and enters into an lease agreement with business entities, who want to hire the goods owned by the petitioner herein. In this type of agreement, the petitioner herein, who is the lessor, is the owner of the assets throughout the agreement. The lease is for a fixed period and on fixed monthly/quarterly rentals. One major clause of the lease agreement, viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. The petitioner submitted their reply, dated 21.06.2007. Gist of the reply is as hereunder:- As regards your contention of the goods not being in our possession physically, we do admit that our lessees already took the delivery of goods and as such the same was not in our possession as on the date of implementation of VAT Act. The taxable event, which is certainly prior to the date of introduction of VAT Act. However, the goods continue to be owned by us and form part of the stock of goods on lease. Thus, goods will be sold and ownership therein transferred only upon completion of the agreement, at which, prior of time VAT under the Tamil Nadu VAT. 6. After the receipt of the reply, the respondent did not take action in the matter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Onceagain, very same allegation, which was made in the notice, dated 31.05.2007 was made in the subsequent notice, dated 27.08.2015. The only mistake committed by the petitioner is that, they did not file their objection to the said notice. Consequently, the respondent has passed the impugned orders, confirming the proposals in the notice, dated 12.10.2015. In the impugned orders, it has been pointed out that tax invoice is not issued in the name of the petitioner as buyer of the goods, and the property in goods are not transferred to the petitioner, but only arrangement is made by the petitioner for finance of the purchase under hypothecation only. Therefore, the respondent held that, it can be concluded that all the local purchases, said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, dated 31.05.2007, there has been a long gap of more than 7 years before the next notice issued, dated 29.04.2014. Even thereafter, for over nearly 1 1/2 years, nothing happened in respect of the petitioner's reply, dated 06.05.2014, and notice was issued on 27.08.2015, without reference to any of the earlier notices or reply notices given by the petitioner. Thus, to that extent, the entire procedural formalities adopted by the respondent is flawed and amounts to violation of principles of natural justice. However, when the notice dated 25.09.2015 was issued, the petitioner, though received the notice, did not file their objections. The stand taken by them for not being able to file their objection within the time permitted does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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