2016 (8) TMI 714 - HC - VAT and Sales Tax

Jurisdiction for surprise inspection or record statement or seize records - Section 48 of the Tamil Nadu Value Added Tax Act, 2006 - Held that - The petitioner would state that the officer does not posses the jurisdiction to record the statement or prepare the inspection report or seize the documents. But however, it appears that the documents were seized from the place of business of the petitioner. Therefore, if the petitioner has any reservations on the statement given by them before the Enforcement Officials, it is always open to the petitioner to raise contention before the assessing officer and it is a settled legal position that the assessing officer, while completing the assessment, cannot solely be guided by the statement recorded by the Enforcement Officials. Therefore, the petitioner need not have any apprehension that their rights and remedies will stand foreclosed, if they allow the impugned inspection report and the statement to stand. It is always well open to the petitioner to contest the merits of the matter, when the assessing officer takes up the issue. Since the petitioner has raised the question of jurisdiction and the respondents have stated that there is delegation of power, this Court is not inclined to quash the inspection report or the statement, at this juncture. - Writ petition dismissed.

Summary

Issues:
Challenging surprise inspection report, jurisdiction of the officer, legality of inspection and statement recording, authority to conduct inspection, validity of seizure of records.

Analysis:
The petitioner challenged a surprise inspection report and statement recording, arguing that the first respondent lacked jurisdiction for such actions. The petitioner cited Section 48 of the TNVAT Act, stating that a Commercial Tax Officer did not have the authority for inspection and statement recording. Additionally, reference was made to Section 65 of the TNVAT Act, highlighting that the Assessing Officer should have the power, and since the petitioner was not within the first respondent's jurisdiction, the actions were deemed illegal. Rule 20 of the TNVAT Rules was also mentioned to support the argument against the officer's authority.

The petitioner also referred to a Notification under the erstwhile Tamil Nadu General Sales Tax Act, similar to Section 65 of the TNVAT Act, suggesting that the powers granted did not extend to a Commercial Tax Officer. The Additional Government Pleader contended that the Commissioner of Commercial Taxes had the authority throughout Tamil Nadu and could delegate powers, authorizing the inspection in question. The officer conducting the inspection, recording statements, and seizing records was deemed to be vested with the necessary powers.

The Court noted that a writ of certiorari could not be issued to quash the inspection report, seizure mahazar, or recorded statement. It was emphasized that the assessing officer, not solely guided by the Enforcement Officials' statements, would consider the matter during assessment. The petitioner was advised to address any concerns during assessment, including disputing ownership of seized records. As the issue of jurisdiction was raised by the petitioner and delegation of power was claimed by the respondents, the Court declined to quash the inspection report or statement at that stage, leaving the jurisdiction matter open for future consideration during assessment proceedings.

The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.