Sri Vinayaka Agencies vs The Commercial Tax Officer

B. Rajendran, J—Since the issue involved in these writ petitions are one and the same, they are taken up together and disposed of by this common order.

Mr. TR. Janardhanam, learned Government Advocate takes notice for all the respondents.

The only point urged in all these Writ Petitions is that under Section 27(4) of the TNVAT Act, before passing an order, a personal hearing has to be given to the applicant. Infact, the petitioner had specifically pleaded for such personal hearing in the reply notice sent by them. Inspite of such request, no personal hearing was given to the petitioner firm. They have also pleaded to furnish certain records and to verify the same to substantiate their claim. However, the documents sought for by the petitioner has not been furnished. Therefore, according to the petitioner, the impugned orders were passed in gross violation of the principles of natural justice and it is against the judgment reported in (2010) 33 VST 333, SRC Projects Pvt. Ltd. v. Commissioner of Commercial Taxes, Chennai and another. Notwithstanding such submission, the learned counsel for the petitioner fairly submits that the petitioner is ready to deposit 15% of the tax amount for each of the assessment years.

The learned Government Advocate would only contend that even as per the decision of the Supreme Court unless safe guard in respect of payment in question is made, the revenue of the Government will be at stake. Initially, the petitioner sought for time to reply. Accordingly, time was also granted. Thereafter, he filed objections, which was also considered in detail and only then, the orders impugned in these Writ Petitions have been passed. To sum up, the orders impugned in these Writ Petitions were passed in accordance with law and they need not be interfered with by this Court.

Heard both sides. On a careful consideration, it is seen that inspite of the fact that the petitioner has sought for a personal hearing to put forth their defence and also sought for production of certain records to substantiate their contention, the respondent has not given any personal hearing to the petitioner firm or furnished the documents sought for by the petitioner before passing the impugned orders. Therefore, such action of the respondent would fall within the ambit of the rulings cited supra, which has been followed by me in several decisions of this Court. The relevant portion is usefully extracted below:--

"24. It is well settled that the existence of an alternative remedy does not oust the jurisdiction of a writ court under Article 226 of the Constitution. Such jurisdiction is plenary in nature. But the existence of alternative remedy operates as an automatic restrain on the discretion of the writ court in the exercise of its jurisdiction. But law in this aspect is well settled and there are well known exceptions where a writ petition is entertained despite non-exhaustion of statutory remedy. If any one of the exceptions exists, it is open to the writ court to exercise its jurisdiction. Those exceptions are if a writ petition has been filed for an enforcement of any fundamental right where there has been a violation of principles of natural justice at the instance of an inferior authority or where the proceedings are wholly without jurisdiction or ultra vires the statute under which such proceedings have been initiated (see Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and Others, AIR 1999 SC 22 : (1998) 7 JT 243 : (1998) 5 SCALE 655 : (1998) 8 SCC 1 : (1998) 2 SCR 359 Supp : (1998) AIRSCW 3345 : (1998) 8 Supreme 176 , Pages 9 & 10 of the report), a writ petition can be entertained.

In Whirlpool Corporation (supra), the learned Judges have considered the various judgments in coming to the aforesaid conclusion. In this connection, learned counsel for the appellant also cited a judgment of a Division Bench of this Court in the case of Sree Murugan Engineering Products Vs. The Commercial Tax Officer, (2006) 148 STC 419 . In paragraph-14 of the said judgment, the learned Chief Justice quoting the judgment of the Supreme Court in the case of State of H.P. and Others Vs. Gujarat Ambuja Cement Ltd. and Another, AIR 2005 SC 3936 : (2005) 6 JT 298 : (2005) 2 SCR 684 Supp : (2005) 142 STC 1 : (2005) AIRSCW 3727 : (2005) 5 Supreme 161 , wherein the same principles have been reiterated, held that in a case where there is violation of principles of natural justice, alternative remedy will not be a bar. We respectfully concur with the views expressed in the said judgment.

Another judgment was also cited by the learned counsel for the appellant in the case of Jayam Traders Vs. Tamilnadu Taxation Special Tribunal and Others, (2004) 136 STC 302 . In this case also, the learned Judges held that though Section 28-A of the said Act does not in terms require a hearing to be given to a dealer who seeks the clarification, but in cases where dealer seeks for a personal hearing, such dealer should be afforded the same in all cases where the Commissioner proposes to record a finding, which is adverse to the dealer, and such adverse order to the assessee can only be made after giving the assessee a hearing.

We also hold, in the facts and circumstances of this case, the impugned order by way of revision of assessment should not have been passed without giving the assessee an opportunity of personal hearing. But since the same has been denied, the impugned order is hereby quashed.

We, therefore, allow the appeals and are constrained to hold that the learned Judge of the writ court was not correct in his conclusion in dismissing the writ petitions inter alia on the ground of non-exhaustion of alternative remedy in the facts and circumstances of the case discussed above. The judgment of the learned Judge is set aside.

We, therefore, direct that the appellant/petitioner must appear before the second respondent in these appeals, who passed the impugned order, within a period of seven days from the date of getting a certified copy of this judgment and thereupon, the second respondent will fix the personal date of hearing in which the appellant must appear and the hearing should be concluded within two weeks thereafter. After such hearing is concluded, the second respondent is at liberty to pass orders in accordance with law after considering the petitioners case, which will be presented in the course of such hearing."

Following the order passed by the Division Bench of this Court, mentioned supra, the impugned orders passed by the respondent are liable to be set aside. Above all, in order to show their bona fide, the petitioner company fairly conceded to deposit 15% of the disputed tax amount, in each of the assessment years. Such deposit has to be made within a period of the two weeks from the date of receipt of a copy of this order.

In the result, the impugned orders are set aside and the matters are remitted back to the respondent for fresh consideration. The respondent is directed to afford an opportunity of hearing to the petitioner firm and thereafter, pass appropriate orders, on merits and in accordance with law, within a period of four weeks from the date of deposit. It is made clear that if 15% of the amount is not deposited by the petitioner within the time limit, the benefit granted by way of this order will not enure in their favour and in such event, the respondent is at liberty to proceed with the impugned orders in the manner known to law. The Writ Petitions are disposed of as indicated above. No costs. Consequently, the connected miscellaneous petitions are closed.