2019 (11) TMI 1542 - HC - VAT / Sales Tax

Validity of assessment order - TNVAT Act - levy of purchase tax - chillies - Assessing officer initiated proceedings for revision of assessment largely based upon the circulars issued by the Commissioner of Commercial Taxes dated October 17 2014 and December 4 2014 - HELD THAT - More or less identical issue was considered by us in W. A. (MD) No. 557 of 2019 etc. batch vide judgment dated October 31 2019 (J. K. Traders v. Assistant Commissioner (CT) 2020 80 GSTR 147 (Mad)) 2019 (11) TMI 666 - MADRAS HIGH COURT . One of the differences in those cases was the commodities dealt with by the appellants/ dealers and that of the commodity dealt with by the appellants/dealers in the present case. The other difference was in those appeals the writ petitions were filed against the revision notices whereas in the instant case the writ petitions were filed challenging the assessment orders. In the said decision the dealer has to exhaust the remedy available under the provisions of the Act and go through the adjudication process and not bypass such remedy. In the instant case also if we apply the same analogy then we have to relegate the appellants to avail the appeal remedy. However taking note of the fact that the revision notices itself came to be issued pursuant to the circulars issued by the Commissioner and there is no detailed consideration of the objections raised by the appellants/dealers in the impugned assessment orders while applying the decision rendered by us in the case referred to supra we are inclined to set aside the impugned order and remand the matter back to the assessing officer to consider the matter as indicated by us in the aforementioned judgment. The assessments orders dated November 23 2015 are set aside and the pre-revision notices are restored to file of the assessing officer - Petition allowed by way of remand.

Summary

Issues:
Challenge to assessment orders under TNVAT Act regarding levy of purchase tax based on circulars issued by Commissioner of Commercial Taxes.

Analysis:
1. The writ appeals were filed by dealers registered under TNVAT Act challenging the order dismissing writ petitions against assessment orders. The legal issue concerned the levy of purchase tax under sections 12 and 15 of the Act, exempting tax on purchase of chillies if total turnover is below a specified amount. The assessing officer initiated revision proceedings based on circulars issued by the Commissioner, binding on revenue but not the court. Dealers can submit objections, and assessing officer must independently apply his mind, as failure to do so is an abdication of statutory powers.

2. A similar issue was addressed in a previous judgment where dealers could contend that circulars do not apply to their case, and assessing officer must consider independently. The assessing officer's role as an independent statutory authority was emphasized, and decisions of the Division Bench highlighted the need for independent assessment uninfluenced by circulars or enforcement directions.

3. The Court set aside the impugned order and remanded the matter to the assessing officer for fresh consideration. Dealers were directed to submit additional objections within a specified period for both legal and factual submissions. The purpose was to ensure a detailed consideration of objections raised by dealers in the assessment process.

4. The earlier findings of the learned single judge were vacated to prevent defeat of the remand purpose. The writ appeals were allowed, the order in the writ petitions was set aside, and the assessment orders were restored to the assessing officer for fresh adjudication. The assessing officer was instructed to make an independent decision based on objections raised by dealers, without influence from circulars or previous court orders.

5. No costs were awarded, and connected miscellaneous petitions were closed. The judgment emphasized the importance of dealers following the proper adjudication process and exhausting available remedies under the Act. The Court's decision aimed to ensure a fair and unbiased assessment process for the dealers involved in the case.