2017 (12) TMI 1545 - HC - VAT and Sales Tax

Maintainability of petition - Jurisdiction - case of petitioner is that the respondent is not empowered to invoke Section 27 of the TNVAT Act for making reassessment on the alleged escaped turnover without following the procedure under the said provision - Held that - the petitioner has raised various factual issues and disputed the observations and findings recorded by the Assessing Officer. Therefore, without analyzing the factual matrix, it cannot be considered as to whether the respondent was justified in invoking Section 27 of the TNVAT Act. The petitioner has to necessarily avail the appellate remedy available under the TNVAT Act which is not only efficacious but also effective. Merely because the statute mandates a pre-deposit is no ground to bypass the appellate remedy. The writ petition is held to be not maintainable and accordingly, dismissed.

Summary

Issues:
Challenge to assessment order under TNVAT Act for assessment year 2015-2016.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged an assessment order dated 10.11.2017 by the respondent. The petitioner contended that the respondent lacked the authority to invoke Section 27 of the TNVAT Act for reassessment without following proper procedures. It was argued that as there was no tax payable on import or interstate purchases and the alleged sales suppression had been reported with tax paid, the respondent had no jurisdiction to estimate sales by adding 15% towards gross profit or purchases. The petitioner also highlighted that no enquiry was conducted, books of accounts were not requested, and facts were not verified by the Assessing Officer.

The Court emphasized that to determine the correctness of the petitioner's claims, factual disputes needed to be examined. Since the petitioner raised various factual issues and disputed the Assessing Officer's observations and findings, it was deemed necessary to analyze the factual scenario to assess the justification of invoking Section 27 of the TNVAT Act. The Court advised the petitioner to utilize the appellate remedy provided under the TNVAT Act, stating that the statutory requirement of a pre-deposit should not be a reason to bypass the appellate process. The Court also noted that there was no valid basis for imposing a penalty under Section 274(3) of the TNVAT Act, which could be challenged before the appellate authority along with other contentions.

Consequently, the Court found the writ petition to be not maintainable and dismissed it. The petitioner was granted the liberty to file an appeal against the impugned order before 12.01.2018, ensuring that the appeal would not be rejected due to limitation if filed within the specified date. No costs were awarded, and the connected Miscellaneous Petition was closed.