2007 (2) TMI 591 - HC - VAT and Sales Tax

Summary

Issues involved: Violation of principles of natural justice and provisions of the Tamil Nadu General Sales Tax Act, 1959 in an assessment order.

Summary:
The petitioner filed a petition before the Tribunal to challenge an assessment order passed by the respondent without issuing a notice and not following the directions of the appellate authority. The petitioner was originally assessed based on returns and books of account for the assessment year 1994-95. Subsequently, the assessment was revised by the respondent based on an inspection report, leading to appeals by the petitioner. The Appellate Assistant Commissioner partly remanded and partly dismissed the appeal, providing specific directions to the assessing officer. However, the assessing officer did not comply with the directions and passed an impugned order. The High Court observed that the assessing officer overreached the appellate authority's order, emphasizing the importance of following hierarchical procedures of statutory authorities. The Court set aside the impugned order and remitted the matter back to the assessing officer to frame a fresh assessment in accordance with the directions of the appellate authority.

The appellate authority's directions included verifying specific details in the petitioner's accounts, cross-verifying transactions with reputed companies, and deleting assessments if transactions were not reflected in buyers' accounts. The assessing officer failed to comply with these directions, leading to the High Court's decision to set aside the order and remand the matter for a fresh assessment. The Court highlighted the assessing officer's obligation to follow the directions of the appellate authority, emphasizing the binding nature of such orders in the assessment process. The Court noted that the assessing officer's failure to adhere to the directions undermined the statutory hierarchy and the principles of natural justice. Consequently, the impugned order was deemed to be overreaching and was set aside for a fresh assessment to be conducted in accordance with the appellate authority's directions.