2019 (9) TMI 698 - HC - VAT and Sales Tax

Principles of Natural Justice - grant of reasonable opportunity - TNVAT Act - detailed reply sent by the writ petitioner being reply to SCN/revisional notice not considered - errors in the computations that have been made by the Assessing Officer in the impugned order - Section 27(1) of TNVAT Act - scope of 'reasonable opportunity to show cause' and 'a reasonable opportunity of being heard' - Assessment of tax. HELD THAT - Both these expressions have been underlined in the extracts and reproduction of same supra for the sake of convenience, clarity and ease of reference. No elucidation or elaboration is required to say that these two expressions are clearly different and distinct. It is also to be noticed that these two expressions are deployed in the same statute. Most importantly, both these expressions have been deployed with regard to revised assessment proceedings. In the considered view of this Court, both Section 22(4) and Section 27(1) deal with assessment other than deemed assessment - While Section 22(4) which is referred to in fiscal law parlance as 'best judgment' deals with situation where no return or incomplete returns filed, Section 27(1) and (2) deal with situation where returns have been filed. It may not be necessary to delve into those aspect of the matter any further as the plain reading and plain language in which these two expressions are couched is unambiguous and it is not even ambivalent. While section 22(4) makes no return being furnished for any 'period of the year', it does not talk about whole of the year, whereas section 27 provides for whole of the turnover of business of a dealer escaping assessment. In the instant case, even according to writ petitioner, no return is submitted, but that is not for any period of the year, but for the entire year/years. Therefore, it is clearly a case where whole of the turnover of a dealer has escaped assessment to tax. While section 22(4) deals with assessment qua dealer, section 27(1)(a) deals with determination of turnover, section 27(1)(b) deals with reassessment of tax due and section 27(2) deals with determination of tax after reversal of ITC. In this view of the matter, owing to the facts and circumstances of the instant case, this court finds no infirmity in respondent Assessing Officer resorting to assessment under section 27(1) of TNVAT Act. Narasus principle is to the effect that Assessing Officer should apply his/her mind independent of the proposal made by the Enforcement Wing and should arrive at a conclusion. In the instant case, after referring to the proposal of the Enforcement Wing, the Assessing Officer has certainly applied her mind to the SCN / revisional notice as well as the objections to the same and given some finding, however correct or however erroneous the same may be, but not preposterous - No ground warranting interference in writ jurisdiction has been made out and it does not qualify as case of violation of NJP also in the light of dispositive reasoning alluded to supra. Alternate remedy - HELD THAT - This Court is informed without disputation or disagreement by both sides that an alternate remedy is available to the writ petitioner qua the impugned order by way of an appeal to the jurisdictional Appellate Deputy Commissioner under Section 51 of TNVAT Act. Therefore, with regard to the grounds canvassed on merits, which are more in the nature of errors in computation, it is well open to the writ petitioner to avail alternate remedy of a statutory appeal to the jurisdictional Appellate Deputy Commissioner under Section 51 of TNVAT Act. Time Limitation - HELD THAT - A perusal of Section 51 of TNVAT Act it reveals that the time limit available for preferring a statutory appeal is 30 days from the date on which the order is served on the dealer - Within 30 days in the instant case is on or before 11.07.2019. As already mentioned supra, instant writ petition has been presented in this Court on 26.07.2019. Therefore, 15 days have elapsed between the expiry of 30 days and presentation of the instant writ petition in this Court. This takes us to the question as to whether this 15 days delay can be condoned, if the period spent by the writ petitioner in the instant writ petition is excluded under Section 14 of the Limitation Act. If the time spent by the writ petitioner in the instant writ petition is excluded while computing the period of limitation, the delay which is sought to be condoned by the Appellate Authority will only be 15 days, which is well within 30 days cap. Therefore, this Court deems it appropriate to hold that in computing limitation for the statutory appeal under Section 51 before the Appellate Authority, if the writ petitioner chooses to avail the alternate remedy, the time spent in the instant proceedings i.e., proceedings in the instant writ petition being W.P.No.22634 of 2019 shall be excluded. For the purpose of absolute clarity and specificity, it is made clear that the time period from 26.07.2019 to the date on which a certified copy of this order is made available by this Registry will stand excluded while computing limitation - Now that such exclusion has been made by this Court, the period of delay which needs to be condoned by the Appellate Authority will be only 15 days if the writ petitioner chooses to avail the alternate remedy and if the writ petitioner files the appeal forthwith on copy of this order being made available by Registry. In any event, there is a leeway and width of 15 more days as the cap is 30 days. This Court holds that there is no ground for interfering with the impugned order in writ jurisdiction and therefore, this writ petition is dismissed but preserving the right of the writ petitioner to avail alternate remedy if the writ petitioner chooses to do so by filing an appeal to the jurisdictional Appellate Deputy Commissioner under Section 51 of TNVAT Act assailing the impugned order.

Summary

Issues Involved:
1. Violation of Principles of Natural Justice (NJP) due to lack of personal hearing.
2. Consideration of the detailed reply to the show-cause notice.
3. Errors in the computation made by the Assessing Officer.
4. Dependence on the proposal given by the Enforcement Wing.

Issue-wise Detailed Analysis:

1. Violation of Principles of Natural Justice (NJP) due to lack of personal hearing:
The petitioner argued that no personal hearing was granted before the impugned order was passed, which is claimed to be a violation of NJP. The court examined whether personal hearing is statutorily imperative under Section 27(1) of the TNVAT Act. The court noted that Section 27(1) requires a "reasonable opportunity to show cause" rather than a "reasonable opportunity of being heard," which is required under Section 22(4). The court concluded that personal hearing is not mandatory under Section 27(1) unless the nature of the issue necessitates it. Moreover, the petitioner did not demonstrate any prejudice caused due to the lack of personal hearing.

2. Consideration of the detailed reply to the show-cause notice:
The petitioner contended that their detailed reply to the show-cause notice was not considered. The court reviewed the impugned order and found that the reply had indeed been considered, as the order referenced the reply and addressed specific points raised by the petitioner. Therefore, the court held that the reply was duly considered, and no violation of NJP occurred on this ground.

3. Errors in the computation made by the Assessing Officer:
The petitioner claimed there were errors in the computation made by the Assessing Officer. The court determined that such errors are grounds for appeal and should be addressed through the statutory appellate process rather than in writ jurisdiction. The court refrained from expressing any opinion on the merits of the computation errors, leaving it to the Appellate Authority to address these issues.

4. Dependence on the proposal given by the Enforcement Wing:
The petitioner argued that the Assessing Officer improperly relied on the proposal from the Enforcement Wing. The court noted that while the proposal from the Enforcement Wing was the genesis for the revision, the Assessing Officer independently applied her mind to the show-cause notice, the reply, and the documents submitted. The court found no violation of the principle established in Narasus Roller Flour Mills vs. Commercial Tax Officer, which requires independent application of mind by the Assessing Officer.

Alternate Remedy:
The court emphasized the principle that alternate remedy is a rule of discretion, especially in tax matters, where it should be applied with utmost rigor. The court noted that the petitioner has an alternate remedy by way of an appeal to the jurisdictional Appellate Deputy Commissioner under Section 51 of TNVAT Act. The court also provided relief by allowing the exclusion of the time spent in the writ petition from the limitation period for filing the appeal.

Conclusion:
The court dismissed the writ petition, preserving the right of the petitioner to avail the alternate remedy of a statutory appeal. The court directed that the time spent in the writ proceedings be excluded from the limitation period for filing the appeal. The court also clarified that all conditions and procedures for the appeal under the TNVAT Act and Rules, including pre-deposit conditions, would apply if the petitioner chooses to appeal.