2016 (1) TMI 1116 - HC - VAT and Sales Tax

Recovery of dues - power of enforcement wing officials to collect cheques - The Commissioner has also issued circulars following the directions of this Court. It appears that the orders as well as administrative instructions have only fallen on deaf ears and as a result, many writ petitions are being filed on similar grounds. - Non-submission or delayed submission of C-Forms - Reversal of input tax credit Held that - The power to levy and demand tax is conferred by the statute and not by consent of the assesse. Any tax levied or demanded must be with the authority of law, otherwise, such a levy would be against the constitutional mandate in Article 265 of the Constitution. In the present cases, the petitioner has submitted their objections claiming that there is no stock difference and that the cheque was collected by force. Therefore, the assessing officer is duty bound to look into the books of accounts, documents and verify the claim of the assesse before passing orders. This Court has time and again held that the enforcement wing officials have no authority to collect cheques. Their duty under Section 65 of the TNVAT Act is limited to inspection and drawing of a report. As per Section 65 (3), the enforcement wing officials, even when they discover that there is an attempt to evade tax, they can only seize the records for the purpose of enquiry. However, the demand can be made only after assessment and that has to be in accordance with law by the assessing authority. Therefore, It is very clear that the enforcement wing officials cannot usurp the powers of the assessing officers and collect cheques. Therefore, the petitioner is entitled to refund of the cheque amount.

Issues Involved
1. Non-consideration of objections and denial of personal hearing.
2. Improper rejection of statutory forms and refusal to revise the assessment.
3. Reversal of Input Tax Credit (ITC) due to non-submission of statutory forms.
4. Unauthorized collection of cheques by enforcement wing officials.
5. Maintainability of writ petitions despite the availability of alternative remedies.

Detailed Analysis

1. Non-consideration of objections and denial of personal hearing
The Court found that the impugned orders were passed mechanically, violating principles of natural justice. Despite the petitioner's objections and request for a personal hearing, the respondent failed to address the objections or provide a hearing. The Court emphasized that a quasi-judicial authority must pass a reasoned order considering all materials presented. The orders were termed non-speaking and reflected a lack of independent application of mind by the respondent.

2. Improper rejection of statutory forms and refusal to revise the assessment
The petitioner argued that the impugned order dated 14.05.2015 was passed without notice, and despite submitting the statutory forms later, the revision request was denied. The Court held that under Section 8(4) of the CST Act, statutory forms can be submitted at any time, and the respondent has the power to extend the time for submission. The refusal to revise the assessment was deemed improper, and the Court directed the respondent to consider the forms and pass revised orders.

3. Reversal of Input Tax Credit (ITC) due to non-submission of statutory forms
The ITC was reversed due to the non-submission of statutory forms. The Court noted that once the assessment under the CST Act is revised, the consequential order under the TNVAT Act must also be revised. The matter was remanded for fresh consideration, and the respondent was directed to pass revised orders and consider the claim for a refund.

4. Unauthorized collection of cheques by enforcement wing officials
The Court reiterated that enforcement wing officials have no authority to collect cheques during inspections. The power to levy and demand tax is conferred by statute and not by consent of the assessee. The Court directed the refund of the cheque amount collected by the enforcement officials, emphasizing that any tax levied must be with the authority of law.

5. Maintainability of writ petitions despite the availability of alternative remedies
The Court held that there is no absolute bar on entertaining writ petitions when there is an alternative remedy available. The impugned orders were unreasoned and violated principles of natural justice, making the writ petitions maintainable. The Court cited precedents where writ petitions were entertained despite alternative remedies due to the violation of fundamental rights or principles of natural justice.

Conclusion
The Court set aside the impugned orders and remanded the matters back to the respondent for fresh consideration. The petitioner was permitted to submit all relevant documents and objections within three weeks. The respondent was directed to provide a personal hearing and pass reasoned orders within four weeks, considering the objections and documents without being influenced by the enforcement wing officials' reports. The Court also directed the respondent to consider the petitioner's claim for a refund.

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