2016 (8) TMI 87 - HC - VAT and Sales Tax

Validity of order - gross procedural violation of the procedure - Held that - Admittedly, the impugned orders have been passed in violation of the procedure contemplated under the Act, which has been set out in the order, referred supra. The procedural error goes to the root of the matter, thereby vitiating the impugned proceedings. One other factor which has to be taken note of is that the designated authority accepted the case of the petitioner for the years 1992-93, 1995-1996 and 1996-97 and entertained the Applications for settlement, that too based upon the certificate issued by the Assessing Officer, which are identical in respect of the other years as well. No reason is forthcoming as to why the designating authority took a different stand only in respect of the three years, which are subject matter of challenge in these Writ Petitions viz. for the years 1991-92, 1993-94 and 1994-95. In the light of the procedural error committed by the authority, the impugned orders call for interference. Matter remanded back.

Summary

Issues Involved:
1. Procedural violations under the Tamil Nadu Settlement of Arrears Act, 2011.
2. Inconsistent acceptance of applications for different years.
3. Remand for fresh consideration.

Detailed Analysis:

1. Procedural Violations under the Tamil Nadu Settlement of Arrears Act, 2011:
The petitioner, a manufacturer of yarn, challenged the orders passed by the designated authority under the Tamil Nadu Settlement of Arrears Act, 2011 (Act No. 29/2011). The court observed that the impugned orders were passed in gross procedural violation of the procedure contemplated under Act 29 of 2011. The court referred to a previous case, M/S Cheran Cements Ltd. v. The Joint Commissioner (CT), Trichy Division, which elaborated on the proper procedure under the Settlement Act. The Act mandates that the designated authority must verify the correctness of the particulars furnished in the application with reference to all relevant records and determine the amount payable at the specified rates. The procedural error in the present case was deemed to go to the root of the matter, thereby vitiating the impugned proceedings.

2. Inconsistent Acceptance of Applications for Different Years:
The court noted that the designated authority had accepted the petitioner’s applications for the years 1992-93, 1995-96, and 1996-97 based on certificates issued by the Assessing Officer, which were identical to those for the years 1991-92, 1993-94, and 1994-95. However, the designated authority took a different stand for the latter years without providing any reason. This inconsistency was highlighted as another factor necessitating interference with the impugned orders.

3. Remand for Fresh Consideration:
Given the procedural errors and the inconsistent acceptance of applications, the court set aside the impugned orders and remanded the matter back to the second respondent for fresh consideration. The second respondent was directed to afford the petitioner an opportunity for a personal hearing to produce the Books of Accounts and relevant records. This would allow for the verification of the correctness of the particulars furnished by the petitioner in the application made under Section 5 of the Settlement Act and the computation made under Section 7 of the Act.

Additional Observations:
The petitioner expressed readiness to make good any deficit as directed by the second respondent and to pay interest on the deficit amount up to the date of filing the application. The court directed the designated authority to take this submission into consideration while permitting the petitioner to settle the dispute.

Conclusion:
The writ petitions were allowed with the aforementioned observations and directions, and the connected miscellaneous petitions were closed without costs.