2018 (6) TMI 1204 - HC - VAT and Sales Tax

Principles of Natural Justice - Validity of assessment order - case of petitioner is that neither the objections or documents given by the petitioners were considered by the Assessing Officer nor the explanation given by them before the Inspecting Team have taken note off - Jurisdiction - authorization by the Joint Commissioner - Held that - The Assessing Officer did not consider the reply given by the petitioner, which is noted in the sworn statement. Therefore, when the respondent issued show cause notice, he should have also taken note of what the petitioner had stated before the Enforcement and cannot mechanically issue a show cause notice. This is a fundamental error committed by the Assessing Officer - The respondent did not consider the objections given by the petitioner in an effective manner - The court has pointed out only one issue by way of illustration and it can be safely stated the similar is the approach of the Assessing Officer in the other issues as well. The Assessing Officer failed to note that he is an independent statutory authority and no person can dictate as to in what manner he has to pass orders. The report of the Enforcement Officer can at best be treated as starting point for issuance of show cause notice. But, once the dealer submits a reply, the Assessing Officer is expected to independently apply his mind and take a decision in the matter. Since such approach has not been made in the instant case, the impugned orders suffer from infirmity calling for interference. Matters are remanded to the respondent for fresh consideration - appeal allowed by way of remand.

Summary

Issues: Challenge to assessment orders under Tamil Nadu Value Added Tax Act, 2006 for the years 2013-14 to 2016-17; Non-consideration of objections, documents, and explanations by Assessing Officer; Jurisdictional challenge to audit authorization; Violation of principles of natural justice.

Analysis:

The petitioner, a registered dealer challenging assessment orders, argued that objections and documents were not considered, and explanations were ignored by the Assessing Officer. Additionally, a jurisdictional challenge was raised against the audit authorization. The court referred to a previous case to reject the jurisdictional challenge, emphasizing the need for proper consideration of submissions.

The petitioner contended that explanations were not considered, books of accounts were not called for, and explanations given to the Enforcement Group were disregarded. The court reviewed relevant documents and found errors in the show cause notice and assessment orders, highlighting the Assessing Officer's failure to consider crucial details provided by the petitioner.

Upon examining the petitioner's sworn statement, show cause notice, objections, and assessment orders, the court noted discrepancies and fundamental errors in the Assessing Officer's approach. The petitioner had responded comprehensively to show cause notices, pointing out defects and providing explanations, which were not adequately addressed by the Assessing Officer.

The court criticized the Assessing Officer for relying too heavily on Enforcement Officer proposals, emphasizing the officer's duty to independently assess submissions and make informed decisions. The court found the Assessing Officer's approach lacking independence and ordered a fresh consideration of the matters with proper evaluation of all relevant details.

Ultimately, the writ petitions were allowed, the assessment orders were set aside, and the matters were remanded for fresh consideration. The court directed the respondent to afford a personal hearing to the petitioner's representative, consider all explanations and documents, and pass a reasoned order in accordance with the law, highlighting the importance of fair and thorough assessment procedures.