2016 (9) TMI 665 - HC - VAT and Sales Tax

Issuance of directions to the respondent to furnish the records in support of the alleged purchases and sales effected through containers - permitting the petitioner to conduct the cross examination of the 3rd parties - conduct a detailed enquiry, before proceeding with the Revision Notices and permit the petitioner to file their final objections and grant a personal hearing - receipt of the copy of the report from the Assistant Commissioner (CT), Central Enforcement Wing, Zone-1 by Assessing Officer - verbatim repetition of the report of the Enforcement Wing for issuance of pre-revision notice - Held that - Assessing Officer is a Statutory Authority, who has to complete the Assessment in accordance with law and not be solely guided by the report of the Enforcement Wing and at best such report should be treated as an information and a cause of action for issuing a show cause notice. Once the dealer files their objections, the Assessing Authority is expected to independently apply his/her mind to the factual details and the legal positions pointed out by the dealer and then take a decision in accordance with law. The petitioner directed to submit a representation to Assessing Officer, clearly indicating the documents which they require. On receipt of the representation, the Assessing Officer, shall address the Assistant Commissioner (CT), Central Enforcement Wing-I, Chennai-6, inform about the directions issued by Court and request for supply of all the documents sought for by the petitioner. After receiving those documents from the Central Enforcement Wing-I, copies there of shall be provided to the petitioner and thereafter, the petitioner is entitled to submit their objections and on receipt of the objections, the Assessing Officer shall afford an opportunity of personal hearing to the petitioner and if the request for cross examination is made, such request should also be acceded to and thereafter, the Assessing Officer shall complete the assessment by independently applying her mind to all the issues that may be pointed out by the petitioner in their objections, after receiving the documents - petition disposed off - decided in favor of petitioner.

Summary

Issues:
- Direction to furnish records for purchases and sales
- Permission for cross-examination of third parties
- Conducting a detailed inquiry before Revision Notices
- Pre-decided matter in pre-revision notices
- Authority's reliance on Enforcement Wing report
- Assessing Officer's duty to independently assess
- Dealer's objections and lack of evidence
- Principles of natural justice and complete records
- Lack of material evidence with Assessing Officer
- Directions for submission of representation and document supply

Analysis:

The petitioner, a registered dealer under TNVAT Act and Central Sales Tax Act, sought directions to furnish records for purchases and sales and permission for cross-examination of third parties. The Court noted pre-revision notices pre-decided the matter, directing the Assessing Officer to be present. The notices stemmed from surprise inspections in 2014, with the Assessing Officer relying on the Enforcement Wing report, verbatim repeating its observations.

The Court emphasized the Assessing Officer's duty to independently assess, not solely relying on the Enforcement Wing report. The dealer denied transactions, questioning lack of evidence from the Enforcement Wing. The Assessing Officer extracted dealer statements and Enforcement Wing observations, highlighting the need for complete records and principles of natural justice.

Clarifying the lack of material evidence, the Assessing Officer was unable to provide requested documents. The Court directed the petitioner to submit a representation for required documents, to be obtained from the Enforcement Wing. Once received, the petitioner could submit objections, have a personal hearing, and request cross-examination. The assessment should be completed independently within eight weeks, emphasizing the need for a fair process and adherence to legal principles.