2021 (10) TMI 1366 - HC - VAT and Sales Tax

Validity of assessment order - direction to appellant to accept the revised return filed by the respondent - extension of input tax credit under the provisions of Section 12(2) of the TNVAT Act - primary and substantial ground which was raised in the writ petitions was that the Assessing Officer was guided by the report issued by the Enforcement Wing Officials which could not have been the basis for completing the assessment - HELD THAT - The lis before the Court was as to whether the revision of assessment was valid and whether there were any procedural impropriety committed by the Assessing Officer. In such circumstances, the finding regarding taxability of the product or otherwise may not be required to be given at that stage as the adjudicatory process is yet to be completed. When the matter stands remanded to the authority, an open remand would be more appropriate, especially when the counter affidavit filed by the appellant was a very brief counter affidavit and the preliminary objection taken by the appellant was that the writ petitions are not maintainable and the respondent should have filed an appeal under Section 51 of the Act - the matter should go back to the Assessing Officer for a fresh decision on merits and in accordance with law. The writ appeals are partly allowed and the order and direction issued in the writ petitions in so far as it remands the matter to the Assessing Officer is sustained.

Summary

Issues:
Challenge to assessment orders based on Enforcement Wing Officials' report, revision of assessment jurisdiction, non-compliance of statutory provisions, application of mind to relevant facts, remand order by Writ Court, validity of revision of assessment, procedural impropriety, taxability determination, maintainability of writ petitions, appeal under Section 51 of the Act, independent decision by Assessing Officer.

Analysis:
The appeals were filed by the Assistant Commissioner challenging the order passed in writ petitions where the respondent, a registered dealer under TNVAT Act, contested assessment orders and sought acceptance of a revised return. The primary issue raised was the reliance on Enforcement Wing Officials' report for assessment, jurisdiction of revision, and non-compliance with statutory provisions. The Writ Court remanded the matter to the Assessing Officer for a speaking order within a specified time frame, focusing on purchase tax levy under Section 12(1) of the TNVAT Act.

The Additional Advocate General argued that the remand order restricted the demand and directed a specific manner of proceeding, which was challenged in the appeals. The respondent's counsel highlighted the reliance on a similar case precedent regarding purchase tax levy on different products, emphasizing the need for the Assessing Officer to consider objections independently without being bound by circulars.

The Court referred to the precedent case where the dealer was directed to exhaust statutory remedies and objections before the Assessing Officer independently. The respondent sought a similar fresh consideration by the Assessing Officer on all factual and legal issues. The Court analyzed the jurisdictional aspects, procedural impropriety, and the need for an independent decision by the Assessing Officer without influence from previous observations or reports.

Ultimately, the Court partly allowed the writ appeals, sustaining the remand order to the Assessing Officer for an independent decision in accordance with the law, emphasizing the need for a fresh assessment without influence from previous findings or reports. The Assessing Officer was directed to afford a personal hearing to the respondent and conduct the assessment process appropriately, ensuring compliance with legal requirements.