2016 (2) TMI 1026 - HC - VAT and Sales Tax

Jurisdiction of Joint Commissioner - VAT Audit was conducted as per the orders of the Joint Commissioner (Commercial Tax Enforcement -1) without any jurisdiction as per the statute - Joint Commissioner (Commercial Tax Enforcement -1) had authorized the Assessing Officer to conduct the audit - Held that - as per provisions of the Section 64 (4) of the TNVAT Act, only the Commissioner can authorize the Deputy Commercial Tax Officer to conduct VAT Audit - impugned order set aside - appeal allowed by way of remand.

Summary

Issues: Jurisdiction of Joint Commissioner to authorize VAT Audit

Analysis:
The petitioner filed a Writ Petition challenging the VAT Audit conducted by the Deputy Commercial Tax Officer under the authorization of the Joint Commissioner. The petitioner argued that only the Commissioner has the jurisdiction to authorize such audits, as per Section 64(4) of the TNVAT Act. The respondents contended that the Joint Commissioner lacked the authority to issue such authorization, and only the Commissioner could do so. The court referred to a previous case where it was held that only the Commissioner can authorize the Deputy Commercial Tax Officer for audits. Since in the present case, the Joint Commissioner had given the authorization, the court found the audit order to be invalid. Consequently, the court set aside the impugned order and remanded the matter back to the Deputy Commercial Tax Officer for fresh consideration, directing them to conduct the audit in accordance with the Act and provide the petitioner with an opportunity for a personal hearing.

Outcome:
The High Court, in the judgment delivered by Justice M. Duraiswamy, disposed of the Writ Petition, setting aside the VAT Audit order dated 24.01.2014 passed by the Deputy Commercial Tax Officer. The matter was remanded back to the officer for fresh consideration in compliance with the statutory provisions. The court emphasized the importance of following the correct procedures as outlined in the TNVAT Act and ensuring that audits are conducted by authorized personnel only. The judgment highlighted the significance of jurisdiction and proper authorization in tax matters, emphasizing the need for adherence to legal provisions to maintain the integrity of the audit process.