No Opportunity given to Assessee for objecting, Penalty under the TNVAT Act not leviable: Madras HC [Read Order]

In a recent judgement, the Madras High Court (HC) held that the Penalty under the Tamil Nadu Value Added Tax Act (TNVAT Act), 2006 is not leviable when no opportunity is given to the assessee for objecting.

Sri Murugan Electrical Stores, the petitioner challenged the impugned assessment orders passed on the ground of violation of principles of natural justice. The penalty of Rs.9,84,377/-, Rs.12,96,897/-, Rs.13,91,919/-, Rs.15,94,266/- and Rs.10,08,618/- have been levied against the petitioner under the provisions of the Tamil Nadu Value Added Tax Act, 2006.

A notice was issued to the petitioner by the respondent on 02.02.2021 in the impugned proceedings, calling upon the petitioner to come for a personal hearing on 18.02.2020 at 11:30 a.m… The date of the personal hearing given to the petitioner is mentioned as 16.02.2020 at 11:30 a.m.

The petitioner contended that, on 18.02.2020, he appeared for the personal hearing as requested in the respondent’s notice dated 02.02.2021. It was stated by the petitioner that the respondent informed him that a fresh notice will be issued to the petitioner, intimating a fresh date for a personal hearing.

In the impugned assessment orders, the respondent has not taken note of the fact that the personal hearing was granted to the petitioner only on 18.02.2020 and not on 16.02.2020 as reflected in the impugned assessment orders.  No fresh notice was also issued to the petitioner by the respondent, intimating a fresh date for a personal hearing. The respondent failed to grant a personal hearing to the petitioner to enable the petitioner to raise objections about the levy of penalty under the TNVAT Act, 2006.

A Single member  Coram comprising Justice Abdul Quddhose observed that principles of natural justice has been violated by the respondent.  The Court quashed the impugned assessment orders dated 29.04.2021 and 27.04.2021 passed by the respondent and the matters are remanded back to the respondent for fresh consideration on merits and by law.

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