2019 (5) TMI 648 - HC - VAT and Sales Tax

Revision of assessment order - deemed assessment - suppression of sales or purchase - TNVAT Act - assessment years 2010-11 to 2015-16 - HELD THAT - It is settled law that while passing the assessment order, the Assessing Officer cannot blindly accept the report of the Enforcement Wing officials of the Department. He has to independently consider whether the said report is factually correct or not. In the instant case, a detailed reply has been given by the petitioner, wherein, they have categorically denied that there is neither sales or purchase suppression with supporting facts and figures - All the factors have not been considered by the respondent under the impugned assessment orders but instead the respondent has outrightly rejected the replies by blindly accepting the Enforcement Wing officers field audit report without any independent source of information. It is clear that the Assessing Officer must take an independent decision and should not blindly accept the Enforcement Wing Officer's report of the Department. For the forgoing reasons, this Court is of the considered view that the respondent has passed the impugned order by total non-application of mind and therefore, all the impugned orders will have to be necessarily quashed - the matters are remanded back to the respondent for fresh consideration - Petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders for the assessment years 2010-11 to 2015-16 based on revisions proposed by Enforcement Wing officials.

Analysis:
The petitioner contended that they regularly filed monthly returns and paid taxes, which were accepted on a deemed assessment basis under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006. However, the respondent later proposed to revise the assessment based on reports from Enforcement Wing officials, sending pre-revision notices to the petitioner for the relevant assessment years. The petitioner denied any suppression of sales or purchases in their detailed replies to these notices.

The petitioner argued that the respondent's revision of assessment was solely based on the Enforcement Wing officials' report, which was confirmed without proper consideration. They claimed that the respondent's assessment orders lacked independent evaluation and were blindly accepted without addressing the objections raised by the petitioner.

The High Court observed that the Assessing Officer cannot merely rely on reports from Enforcement Wing officials but must independently assess the accuracy of such reports. In this case, the petitioner had provided detailed responses denying any wrongdoing, supported by facts, figures, and legal precedents. The Court noted that the respondent failed to consider these submissions and instead accepted the Enforcement Wing officers' audit report without independent verification.

Citing legal precedents, including the case of Madras Granites (P) Limited vs. Commercial Tax Officer, the Court emphasized the importance of Assessing Officers making independent decisions and not being influenced by reports from internal departments. The Court concluded that the respondent's assessment orders lacked proper consideration and were passed without due application of mind.

Consequently, the High Court quashed the impugned assessment orders and remanded the matters back to the respondent for fresh consideration. The Court directed the respondent to provide the petitioner with an opportunity to raise objections, including the right to a personal hearing, and instructed the respondent to issue final orders within eight weeks from the date of the Court's order. The writ petitions were allowed, with no costs awarded, and connected miscellaneous petitions were closed.