2013 (4) TMI 528 - HC - VAT and Sales Tax

Notices of revision of assessment issued u/s 27 of the Tamil Nadu Value Added Tax Act calling upon assessee to file their objections within 15 days of receipt of the notices - The legality of the impugned notices, has been called in question on the ground by the assessee that the Enforcement Wing Officer cannot act as an AO and frame the revision of assessment, and therefore, the D-3 proposals cannot be simply adopted by the respondent without application of mind - Held that - In the present case, the petitioner-Company has not availed of the opportunity given to them by filing objections to the impugned notices. The grievance of the petitioner is in respect of levying higher rate of tax at 12.5% instead of 4%, which is a matter to be adjudicated before the authority concerned. The approach of the petitioner in rushing to this Court by filing these Writ Petitions, challenging the notices simpliciter , without even filing the objections before the respondent, cannot be sustained. Therefore, the impugned proposal of the respondent for revision of assessment, is subject to the consideration of the objections to be filed by the petitioner, and only after receipt of the objections, the respondent could form any opinion in accordance with law. The claim of the petitioner that the Enforcement Wing Officer s report cannot form the basis for the impugned revision of assessment and he has no role to act as Assessing Officer and the respondent cannot simply adopt the D-3 proposal, which is a matter for concern before the respondent on filing the objections by the petitioner. Writ Petitions disposed of, with a direction to the petitioner-Company to file their objections to the impugned revision notices, before the respondent, within a period of two weeks from the date of receipt of a copy of this order & the respondent shall consider the same, afford an opportunity of hearing, bear in mind the provision of law and thereafter take a decision uninfluenced by the report of the Enforcement Wing Officer and pass appropriate orders, on merits.

Summary

Issues:
Challenge to notices of revision of assessment under the Tamil Nadu Value Added Tax Act.

Analysis:
The petitioner-Company engaged in BPO services challenges revision notices issued under Section 27 of the TNVAT Act for various assessment years. The petitioner purchased infrastructures for their office operations and sold scrap assets. They registered under TNGST Act and TNVAT Act, paying tax on scrap sales. The respondent issued notices proposing a higher tax rate on inter-State purchases, leading to objections by the petitioner. The Enforcement Wing Officer pointed out defects in the petitioner's tax filing, leading to the impugned notices proposing a higher tax rate. The petitioner challenges the notices, arguing that the assessment should be based on sale value, not book value, and that the Enforcement Wing Officer cannot frame assessments. The petitioner contends that the notices are contrary to established law and not sustainable, citing relevant legal precedents.

The petitioner argues that the impugned notices are erroneous as the Enforcement Wing Officer cannot act as an Assessing Officer and the D-3 proposals were blindly adopted without due consideration. The respondent, however, defends the notices under Section 27 of the TNVAT Act, stating that the petitioner had the opportunity to file objections before challenging the notices in court. The Court notes that the petitioner did not avail of this opportunity and rushed to court without filing objections. The Court emphasizes that challenging a notice without availing the opportunity to file objections is not maintainable unless there is a violation of fundamental rights, principles of natural justice, or relevant laws.

The Court directs the petitioner-Company to file objections to the impugned revision notices before the respondent within two weeks. The respondent is instructed to consider the objections, provide a hearing, and make a decision in accordance with the law within four weeks of receiving the objections. The Court highlights that the Enforcement Wing Officer's report should not solely form the basis for the revision of assessment, and the respondent must consider the objections filed by the petitioner before making a decision. The Writ Petitions are disposed of with these directions, emphasizing the importance of following due process and legal procedures in challenging assessment notices under the TNVAT Act.