2021 (6) TMI 910 - HC - VAT and Sales Tax

Validity of provisional assessment order - pre-amended provision under Section 19 for an input tax credit is to be considered for the purpose of passing an assessment order - Section 51 of the TNVAT Act - HELD THAT - Institutional respect is of paramount importance. Even the point of jurisdiction, limitation, error apparent on the face of the record, are on merits and all are to be adjudicated before the appellate authority and the appellate authority, more specifically, the Appellate Tribunal or the Commissioner (Appeals), as the case may be, is empowered to adjudicate all such legal grounds raised by the respective parties and make a finding on merits. Thus, usurping the powers of the appellate authorities by the High Court by invoking its powers under Article 226 of the Constitution of India is certainly unwarranted. The parties must be provided an opportunity to approach the appropriate authorities for redressal of their grievances in the manner known to law. In the event of entertaining all such writ petitions, the High Court will not only be over-burdened, but usurping the powers of the appellate authority, which is certainly not desirable. Jurisdictional error should not result in exoneration of liability - Jurisdictional error, if any committed, is technical, and thus, rectifiable. In such circumstances, the Courts are expected to quash the order passed by an incompetent authority and remand the matter back for fresh adjudication. The higher authorities of the Department are expected to be watchful and review the orders passed by the subordinate authorities and in the event of any negligence, dereliction of duty, collusion or corrupt activities, such officials are liable to be prosecuted apart from initiation of departmental disciplinary proceedings. The procedures to be followed in the department for assessment are well settled. Thus, the authorities competent are not expected to commit such jurisdictional errors in a routine manner. In these circumstances, review of such orders by the higher authorities are imminent to form an opinion that there is willful or intentional act for commission of such jurisdictional errors, enabling the assesses to get exonerated from the liability. Liability and jurisdictional errors are distinct factors, and therefore, Courts are expected to provide an opportunity to the Department to decide the liability on merits and in accordance with law with reference to the provisions of the Act and Rules and guidelines issued by the Department. The authorities competent shall proceed with the final assessment by affording opportunity to the assessee and by following the procedures contemplated under the statute. If any final assessment order has been passed thereafter, if the petitioner is aggrieved, he is at liberty to prefer appeal under Section 51 of TNVAT Act - Petition disposed off.

Issues Involved:
1. Erroneous application of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) by the Assessing Officer.
2. Application of the amended Section 19 of the TNVAT Act to assessment years prior to the amendment.
3. Jurisdictional error and non-application of mind by the Assessing Officer.
4. Availability and necessity of exhausting statutory appellate remedies before filing a writ petition.

Issue-wise Detailed Analysis:

1. Erroneous application of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) by the Assessing Officer:
The petitioner challenged the provisional assessment order dated 06.12.2013 for the assessment year 2013-14, arguing that the Assessing Officer erroneously applied the provisions of the TNVAT Act, resulting in an exercise of jurisdiction that was erroneous. The petitioner contended that the assessment order was passed without following the procedures contemplated under the statute, leading to a jurisdictional error.

2. Application of the amended Section 19 of the TNVAT Act to assessment years prior to the amendment:
The petitioner highlighted that the amendment to Section 19 of the TNVAT Act, introduced by the Tamil Nadu Act 13 of 2015, took effect from 29.01.2016. The petitioner argued that this amendment should not apply to the assessment year 2013-14. The pre-amendment provision of Section 19, which allows input tax credit for tax paid or payable under the TNVAT Act, should be considered instead. The petitioner asserted that the Assessing Officer erroneously applied the post-amended provision to the assessment year in question, indicating a lack of application of mind and a jurisdictional error.

3. Jurisdictional error and non-application of mind by the Assessing Officer:
The petitioner contended that the impugned order was passed with a jurisdictional error and based on an erroneous application of law. The petitioner argued that when an order is passed without application of mind, it constitutes a jurisdictional error, justifying the filing of a writ petition without exhausting the statutory appellate remedy. The petitioner relied on certain judgments to support the contention that the appellate remedy can be dispensed with in cases of jurisdictional errors.

4. Availability and necessity of exhausting statutory appellate remedies before filing a writ petition:
The court emphasized the importance of exhausting the statutory appellate remedies provided under the TNVAT Act before approaching the High Court. Section 51 of the TNVAT Act provides for an appeal to the Appellate Deputy Commissioner, and Section 58 provides for an appeal to the Appellate Tribunal. The court noted that exhausting the appeal remedy is the rule, and dispensing with it is an exception. The court highlighted that the appellate authority is the final fact-finding authority and that their findings are crucial for the High Court's judicial review under Article 226 of the Constitution of India. The court elaborated on the separation of powers and institutional respect, stating that the High Court should not usurp the powers of the appellate authorities by entertaining writ petitions without valid and substantiated reasons.

Conclusion:
The court directed the respondent to proceed with the final assessment and pass the assessment order on merits, in accordance with law, and by affording an opportunity to the petitioner. The court emphasized the necessity of exhausting the statutory appellate remedies provided under the TNVAT Act before filing a writ petition. The writ petition was disposed of with the direction to complete the final assessment within twelve weeks from the date of receipt of the court's order.

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