2002 (12) TMI 567 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the best judgment assessment conducted by the Assessing Authority.
2. Legitimacy of the suo motu revision by the Joint Commissioner.
3. Right of the assessee to challenge adverse findings in suo motu proceedings.
4. Procedural correctness of the Special Tribunal's dismissal of the original petition.

Issue-wise Detailed Analysis:

1. Validity of the Best Judgment Assessment:
The assessee, a hotelier, reported a taxable turnover of 'Nil' for the assessment year 1989-90. The Assessing Authority, upon checking the accounts, found several defects such as suppressed daily sales, low gross profit, and purchases from unregistered dealers without proper documentation. Consequently, the Assessing Authority conducted sales observations on two dates and proposed to reject the returns and determine the taxable turnover based on the best judgment assessment. The final taxable turnover was calculated at Rs.10,73,888/-. The Appellate Assistant Commissioner upheld the sales turnover but reduced the purchase turnover, resulting in a total turnover of Rs.9,97,318/-, which was below the taxable limit. This decision was later revised by the Joint Commissioner, who adjusted the purchase turnover estimation and fixed the taxable turnover at Rs.10,08,004/-.

2. Legitimacy of the Suo Motu Revision by the Joint Commissioner:
The Joint Commissioner initiated suo motu revision proceedings, considering the order of the Appellate Assistant Commissioner prejudicial to the interest of the Revenue. The petitioner contended that the Joint Commissioner should have considered the entire order, including parts adverse to the assessee. However, the Special Tribunal and the Court held that Section 34 of the Tamil Nadu General Sales Tax Act does not provide for the assessee to challenge adverse findings in suo motu proceedings. The Joint Commissioner's power is limited to correcting orders prejudicial to the Revenue.

3. Right of the Assessee to Challenge Adverse Findings in Suo Motu Proceedings:
The petitioner argued that even after the amendment to Section 34, it should be open for the assessee to challenge adverse parts of the appellate order in suo motu proceedings. The Court rejected this argument, stating that the Act provides specific appellate and revisional remedies for the assessee under Sections 31, 36, and 38. The suo motu revisional power under Section 34 is exclusively for the Joint Commissioner to address issues prejudicial to the Revenue, and the assessee cannot invoke this provision to challenge adverse findings.

4. Procedural Correctness of the Special Tribunal's Dismissal of the Original Petition:
The petitioner filed an Original Petition challenging the order of the Appellate Assistant Commissioner while an appeal was pending before the Special Tribunal. The Special Tribunal dismissed the petition, noting that the order in question had already been revised and was under appeal. The Court upheld this dismissal, emphasizing that the petitioner could not challenge the same order in multiple proceedings. The Court also noted that the assessment was based on reasonable grounds, and the Joint Commissioner had provided relief for certain purchases, reducing the taxable turnover.

Conclusion:
Both writ petitions were dismissed. The Court found no merit in the arguments presented by the petitioner and upheld the decisions of the Assessing Authority, Joint Commissioner, and Special Tribunal. The suo motu revision by the Joint Commissioner was deemed legitimate, and the procedural correctness of the Special Tribunal's dismissal was affirmed. The Court emphasized the specific appellate and revisional remedies available to the assessee under the Act and ruled out the possibility of challenging adverse findings in suo motu proceedings.