2017 (11) TMI 1031 - HC - VAT and Sales Tax

Validity of assessment order - TNGST Act - Jurisdiction - Held that - identical issue decided in the case of M/s. Salem Steel Suppliers, M/s. Madras Steel Agencies, M/s. Rajyog Steels, M/s. Reliable Steels, M/s. Myco Steel Agency Versus The Deputy Commissioner (CT) , The Commercial Tax Officer 2017 (9) TMI 946 - MADRAS HIGH COURT , where it was held that The power under Section 16(1) is wide enough and cannot be said to be limited to assessment of assessable turnover under that sub-section by the Assessing Authority only. It is to be invoked in all cases, where, a statutory functionary under the Act assumes jurisdiction to assess the escaped turnover. Therefore, it was held that, in passing an original order of assessment, the Board exceeded its powers under Section 34, and that the order was also passed beyond time. Therefore, the order was held to be unenforceable in law. - petition allowed - decided in favor of petitioner.

Issues:
1. Allegation of tax and penalty against the petitioner based on transactions with specific companies.
2. Validity of assessment order under the Tamil Nadu General Sales Tax Act, 1959 for the assessment year 2002-2003.
3. Jurisdiction of the Deputy Commissioner under Section 32 of the TNGST Act.
4. Reopening of concluded assessment by the Assessing Officer.
5. Application of statutory provisions regarding revisional powers under Section 34 of the Madras General Sales Tax Act, 1959.
6. Examination of the power of the Joint Commissioner under Section 34 of the TNGST Act.
7. Jurisdiction of the Deputy Commissioner to enhance turnover and limitation period under Sections 16 and 32 of the TNGST Act.
8. Scope of revision by the Joint Commissioner under Section 34 based on materials available on record.

Analysis:
1. The petitioner contested the assessment order under the Tamil Nadu General Sales Tax Act, 1959 for the assessment year 2002-2003, alleging transactions with specific companies. The court noted that similar allegations were previously challenged in a batch of cases where the court allowed the writ petitions, emphasizing the need for independent inquiry before re-opening assessments.

2. The court examined the powers of the Deputy Commissioner under Section 32 of the TNGST Act, highlighting that the Deputy Commissioner's suo-moto power is to scrutinize orders passed under specific provisions. The court emphasized that the Deputy Commissioner cannot re-open assessments without new material or beyond the limitation period of five years.

3. Citing precedents, the court discussed the application of statutory provisions regarding revisional powers under Section 34 of the Madras General Sales Tax Act, 1959. It was noted that revisional powers must adhere to the Act's provisions and limitations, emphasizing the need for objective satisfaction and compliance with statutory guidelines.

4. The court analyzed the power of the Joint Commissioner under Section 34 of the TNGST Act, emphasizing that the Joint Commissioner cannot rely on extraneous materials not on record. The court held that revising orders based on materials already available with the Assessing Officer renders such notices unsustainable.

5. Addressing jurisdiction issues, the court discussed the Deputy Commissioner's authority to enhance turnover and the limitation period under Sections 16 and 32 of the TNGST Act. The court emphasized that reopening assessments beyond the five-year limitation period is impermissible under the Act.

6. The court's analysis highlighted the importance of adherence to statutory provisions and limitations in exercising revisional powers under the TNGST Act. The judgment emphasized the need for proper inquiry, objective satisfaction, and compliance with statutory guidelines to ensure the validity of assessment orders and revisional actions.

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