2015 (12) TMI 1652 - HC - VAT and Sales Tax

Natural justice - the mandate of law u/r 10(11) of the TNVAT Rules, 2007, for calling for the records for a detailed scrutiny, was not followed - alternative remedy of appeal - Held that - the grievance of the appellant as against the Assessing Officer is not something that still entitles the appellant to bye- pass the alternative remedy of appeal. Therefore despite the fact that we are unable to approve the manner in which the Assessing Officer dealt with the objections, we do not wish to entertain the writ appeals - appeal dismissed - decided against appellant.

Summary

Issues:
Challenging assessment orders based on pre-revision notices, alternative remedy of appeal, lack of application of mind by the Assessing Officer, grievance against the manner of passing orders, liability towards tax, pre-deposit for appeal, granting reprieve to the appellant.

Analysis:
The appellant challenged the pre-revision notices issued for assessment years 2011-12, 2012-13, and 2013-14, following a surprise inspection by the Enforcement Wing. The appellant contended that the notices were based on an Audit Report and did not comply with Rule 10(11) of the Tamil Nadu Value Added Tax Rules, 2007. The writ petitions filed against these notices were initially disposed of by directing the appellant to respond and produce accounts for a detailed scrutiny by the Assessing Officer.

Subsequently, the Assessing Officer passed orders in August and September 2015, which led to the appellant filing new writ petitions challenging these assessment orders. However, these petitions were dismissed on the grounds of the availability of an alternative remedy of appeal. The court highlighted that the alternative remedy of appeal could only be bypassed in specific circumstances such as a violation of natural justice, lack of jurisdiction, or incompetence, which were not present in this case.

The appellant argued that the assessment orders lacked proper application of mind and indicated mala fide intentions on the part of the Assessing Officer. Specific instances were cited where the Assessing Officer's language and actions were deemed inappropriate. While the court acknowledged these concerns, it emphasized that they did not warrant bypassing the appeal process. The total tax liability for the appellant was significant, amounting to approximately Rs. 75,00,00,000, necessitating a pre-deposit of 25% for an appeal, with an additional 25% typically required for a stay.

Recognizing the potential financial strain on the appellant, the court decided to grant some relief. The judgment directed the appellant to file statutory appeals within four weeks, along with 25% of the tax demanded. Upon filing the appeals, the appellate authority was instructed to independently review the cases and dispose of them within three months. In the interim, the appellant was granted an order of stay on the remaining tax demands. The judgment concluded by closing the connected miscellaneous petitions without imposing any costs.