2018 (10) TMI 347 – MADRAS HIGH COURT – TMI – Revision of assessment – rejection of claim of exemption for interstate purchase of building materials – Section 3B(2)(b) of the TNGST Act, 1959 – Held that:- A careful perusal of notice of proposal dated 11.06.2008, would indicate that the same does not reveal any material details or particulars as to how the Assessing Officer proposed to disallow the exemption already granted in respect of purchases made through interstate sale to the tune of ₹ 1,80,16,025/-. Except stating that on examination of assessement on records, it is seen that turnover of ₹ 1,80,16,025/-, being the interest purchase of building materials, were wrongly allowed exemption, the said notice does not disclose as to what materials found in the assessment records had driven the Assessing Officer to make such proposal for disallowing the exemption.
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The reasons given for disallowing exemption, would show that such reasonings were not referred in the form
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s aggrieved against the order dated 03.11.2008, revising the assessment in respect of assessment year 2004-05. 2. The petitioner is a Limited Company engaged in the business of Civil construction and a registered dealer under the second respondent. The assessment for the year 2004-05 under TNGST was completed and an order of assessment was passed by the second respondent on 15.11.2006, wherein the second respondent had allowed exemption of ₹ 1,80,16,025/-, representing value of building materials purchased in the course of interstate trade. However, on 11.06.2008, the second respondent issued a notice of proposal for revising the assessment by rejecting the claim of exemption for interstate purchase of building materials for the above said value of ₹ 1,80,16,025/-. The petitioner made their objection on 24.06.2008. However, the second respondent passed the impugned order on 03.11.2008, disallowing the exemption already granted in the original order of assessment in respect
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order of assessment dated 15.11.2006. Therefore, he submitted that without there being any valid reason, such conclusion arrived by the Assessing Officer cannot be changed or altered by way of revision. 4.On the other hand, the learned Additional Government Pleader appearing for the respondents submitted that when the petitioner was not entitled to exemption in respect of purchases of building materials effected through interstate sale, the Authority is entitled to revise the order of assessment granting such exemption. He further submitted that the present impugned order was passed only after issuing notice of proposal and considering the reply submitted by the petitioner to such notice. Therefore, he contended that the impugned order need not be interfered with. 5.Heard both sides and perused the materials placed before this Court. 6.The issue involved in this case is in respect of purchases of the building materials made by the petitioner effected through interstate sale. The petit
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emption already granted in respect of purchases made through interstate sale to the tune of ₹ 1,80,16,025/-. Except stating that on examination of assessement on records, it is seen that turnover of ₹ 1,80,16,025/-, being the interest purchase of building materials, were wrongly allowed exemption, the said notice does not disclose as to what materials found in the assessment records had driven the Assessing Officer to make such proposal for disallowing the exemption. 8. Needless to state that the assessee will be in a position to file an effective reply to the notice of proposal only when such notice contains the material details and particulars regarding the proposal. In the absence of such details and particulars, certainly the assessee will not be in a position to effectively make a reply and defend the case before the Assessing Officer. However, the assessee in this case has given their reply on 24.06.2008 and requested to drop the proceedings. They strongly relied on S
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on 11.06.2008. Needless to say that a reasoning in the order of assessment should emerge from the related grounds raised in the notice of proposal and not to be stated as the first time, while passing the order of assessment. In other words, the assessee cannot be put to surprise with certain reasons in the assessment order, when crux of such reasons, in the form of grounds, is not stated in the notice of proposal. At the same time, at this stage, this Court is not expressing any view on the correctness or otherwise of the reasons assigned by the Assessing Officer in the impugned order, as this Court is inclined to interfere with the same only on the reason that the same was passed strictly not by following the principles of natural justice. Therefore, this Court is of the view that the matter has to go back to the Assessing Officer once again for redoing the revision of assessment on merits and in accordance with law, after issuing a fresh notice of proposal with material details and
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