2016 (9) TMI 828 - HC - VAT and Sales Tax

Validity of decision taken by the Assessing Officer solely on the basis of report of Enforcement Wing - opportunity of being heard not provided to petitioner - TNVAT Act, 2006 - inspection conducted by Enforcement Officers in the place of business of petitioner - the decision in the case Madras Granites Private Limited Vs. Commercial Tax Officer, Arisipalayaam Circle, Salem and another 2002 (10) TMI 767 - MADRAS HIGH COURT shall apply - Held that - the decision in the case Madras Granites Private Limited should be an eye-opener for the Assessing Officer to act as an independent authority. The procedure of sending the deviation proposal to the Enforcement wing is an internal matter. The statute does not state that the Assessing Officer, should act as per the dictates of the Enforcement Wing. The pre-revision notices were issued to the petitioner pursuant to an inspection by the Enforcement Wing in the business premises of the petitioner. In recent decisions, it was held that the report can at best, be treated as an information or the first information to the Assessing Officer giving a cause of action for issuing the revision notice and nothing more can be attached to such a report given by the Enforcement Wing. It is thereafter, the entire proceedings are in the hands of the Assessing Officer who should exercise his statutory powers, apply correct legal principles and then take a decision in the matter. Assessing Officer to apply his mind to arrive at a decision. Opportunity of being heard to be provided to the petitioner - petition disposed off - decided in favor of petitioner.

Summary

Issues:
Seeking quashing of intimation by the 1st respondent and direction for adjudication for assessment years 2007-08 to 2014-15.

Analysis:
The petitioner sought a writ to quash the intimation by the 1st respondent and direct adjudication for assessment years 2007-08 to 2014-15. The 1st respondent, the petitioner's Assessing Officer, issued pre-revision notices for these years following an inspection by Enforcement Officers. The petitioner submitted objections, expecting a personal hearing and further proceedings. Surprisingly, the 1st respondent sent a deviation proposal to the 2nd respondent without taking action, prompting the petitioner to request finalization. However, the 1st respondent's intimation stated that the request could not be considered until the higher authority's reply. The court emphasized the 1st respondent's duty to complete assessments independently and not solely follow superior's directions.

The court referenced a previous judgment highlighting the assessing officer's duty to act independently, not bound by higher authority's directions. It emphasized the assessing officer's quasi-judicial role and the need to apply legal principles without undue influence. The court held that assessments solely based on higher authority's directions are not legally sustainable. The assessing officer was directed to reassess independently after giving the petitioner an opportunity.

The court emphasized the assessing officer's duty to act independently and apply correct legal principles. It clarified that reports from enforcement wings provide only initial information, and subsequent proceedings are the responsibility of the assessing officer. The court directed the 1st respondent to make decisions for the mentioned assessment years based on petitioner's reply, without waiting for advice from the 2nd respondent's deviation proposal.

In conclusion, the court disposed of the writ petitions by instructing the 1st respondent to independently assess the mentioned years after considering the petitioner's submissions and providing a personal hearing. The 1st respondent was directed to act promptly, ideally within six weeks, without awaiting guidance from the 2nd respondent. No costs were awarded, and related petitions were closed.