2018 (10) TMI 1406 - HC - VAT and Sales Tax

Rejection of application for settlement - rejection on the ground that the petitioner is not a registered dealer under the provisions of the Tamil Nadu General Sales Tax Act, 1959 - the petitioner did not have any opportunity to submit their defenses - principles of natural justice - Held that - Admittedly, before the impugned orders are passed, the petitioner did not have any opportunity to submit their defenses. This opportunity ought to have been provided by the second respondent since there is a reference to the recommendation made by the first respondent stating that the petitioner is not eligible for enrollment under the Settlement Act. The other reason given is that the orders have been passed by the Commercial Tax Officer concerned based on the calculations made by the officers of the Enforcement Wing. In the considered view of this Court, if the same is true, it would amount to abdication of statutory duties by the Assessing Officer by merely following the proposals made by the Enforcement Wing officials. Petitioner not a registered dealer - Held that - It is seen that the respondent Department issued notices to the petitioner calling upon them to avail the benefit under the Settlement Act and intimating them that the last date for filing the applications was 31.12.2010 - The petitioner also presented the applications and remitted tax. After the applications were processed, the second respondent (predecessor officer) issued the communications dated 08.2.2011 to the Assessing Officer calling upon various details to be produced. Thus, the petitioner has been led to believe that their applications have been entertained and would be processed. Hence, the impugned orders rejecting the applications of the petitioner are not tenable. The matters are remanded to the second respondent for a fresh consideration - petition allowed by way of remand.

Summary

Issues:
1. Rejection of applications for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010.
2. Lack of opportunity provided to the petitioner to submit defenses before rejection.
3. Disqualification based on dismissed appeals before Appellate Authority and Tribunal.
4. Concerns regarding abdication of statutory duties by the Assessing Officer.
5. Disqualification for not being a registered dealer under the Tamil Nadu General Sales Tax Act, 1959.
6. Inconsistency in reasons provided for rejection.
7. Late assertion of inability to entertain applications after processing and remittance of tax.

Analysis:
The judgment addresses the rejection of the petitioner's applications for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2010. The second respondent rejected the applications citing various reasons, including the petitioner not being a registered dealer under the Tamil Nadu General Sales Tax Act, 1959. However, the court noted that the petitioner was led to believe their applications were being processed after submitting them and remitting tax. The court found the rejection based on this ground untenable as the petitioner had followed the process as directed by the Department.

Another issue raised was the lack of opportunity provided to the petitioner to submit defenses before the rejection of their applications. The court emphasized that the petitioner should have been given an opportunity to present their case, especially considering the seriousness of the matter involving settlement of arrears under the Act.

Additionally, concerns were raised regarding the disqualification of the petitioner based on dismissed appeals before the Appellate Authority and Tribunal. The court clarified that the pendency of appeals does not disqualify a dealer from approaching the Joint Commissioner under the Settlement Act. Therefore, this reason for rejection was deemed incorrect.

The judgment also highlighted the issue of possible abdication of statutory duties by the Assessing Officer if they merely followed the calculations made by Enforcement Wing officials. The court expressed that such actions would be a violation of the officer's responsibilities and duties under the law.

Moreover, the court noted inconsistencies in the reasons provided for rejection, including a late assertion that the petitioner was not entitled to make payment by cheque. The court found it unreasonable for the second respondent to now claim that the applications could not have been entertained after the petitioner had already followed the prescribed procedures and remitted the tax.

In conclusion, the court allowed the writ petitions, quashed the impugned orders, and remanded the matters to the second respondent for a fresh consideration. The second respondent was directed to review the petitioner's applications on merit, provide a personal hearing, and ensure compliance with the Settlement Act provisions.