2022 (7) TMI 28 - HC - VAT and Sales Tax

Prayer for writ of Mandamus to appoint a Joint Commissioner from the Commercial Taxes Department to consider the legality of the assessment orders passed by the third respondent relating to the assessment years Tamil Nadu Value Added Tax 2011-12, 2012-13 and 2013-14 - validity of pre-assessment notice - HELD THAT - The question of appointment of Joint Commissioner from the Commercial Tax Department to consider the legality of the Assessment Orders passed by the third respondent therein namely, the Commercial Tax Officer for the Assessment Years 2011 - 2012, 2012 - 2013 and 2013 - 2014 respectively, cannot be countenanced in the light of the fact that the issue has travelled up to the Hon ble Supreme Court. That apart, the petitioner s appeals were pending before the second respondent/Appellate Deputy Commissioner. Further orders may have been passed during the pendency of the appeal before the Hon ble Supreme Court by the Appellate Deputy Commissioner inasmuch as the Hon ble Supreme Court while dismissing the appeal filed by the petitioner against the order of the Division Bench, in M/S. V.V.V. AND SONS EDIBLE OIL LIMITED, VERSUS THE COMMERCIAL TAX OFFICER-1 (FAC) , VIRUDHUNAGAR 2015 (12) TMI 1652 - MADRAS HIGH COURT had affirmed the decision of the learned Single Judge in M/S. V.V.V AND SONS EDIBLE OILD LIMITED VERSUS THE COMMERCIAL TAX OFFICER 1 (FAC) VIRUDHUNAGAR. 2015 (11) TMI 1867 - MADRAS HIGH COURT and had granted liberty to the petitioner to file a statutory appeal under Section 58 of the Tamil Nadu Value Added Tax Act, 2006. That apart, the provisions of the Tamil Nadu Value Added Tax Act, 2006 also does not contemplate appointment of the Joint Commissioner or any other Officer from the Commercial Tax Department as an arbitrator to decide the legality of the Assessment Orders or Revision Notice which are the subject matter of appeal before the Appellate Commissioner or by the Appellate Tribunal as the case may be. The impugned notice has relied upon the inspection by the enforcement being officers on 24.10.2014 and 25.10.2014. Serious allegations have been leveled against the petitioner in the said notice. It is for the petitioner to reply to the same to distance itself from the proposals contained therein, in such proceedings. Proceedings initiated under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 cannot be scuttled. There are no merits in the petition - petition dismissed.

Issues Involved:
1. Appointment of a Joint Commissioner to review assessment orders.
2. Challenge to the pre-reassessment notice dated 06.07.2018.
3. Legality of assessment orders for the years 2011-12, 2012-13, and 2013-14.
4. Compliance with statutory appeal procedures and timelines.
5. Allegations of mala fide intentions by the Assessing Officer.
6. Validity of recovery proceedings initiated by the department.
7. Request for arbitration similar to the case of Madras Cements Limited.
8. Precedent cases and their applicability to the current case.

Detailed Analysis:

1. Appointment of a Joint Commissioner to Review Assessment Orders:
The petitioner sought a writ of Mandamus to appoint a Joint Commissioner from the Commercial Taxes Department to consider the legality of the assessment orders for the years 2011-12, 2012-13, and 2013-14. The court found that the issue had already been addressed up to the Supreme Court, and the petitioner's appeals were pending before the Appellate Deputy Commissioner. The provisions of the Tamil Nadu Value Added Tax Act, 2006, do not contemplate the appointment of a Joint Commissioner or any other officer as an arbitrator to decide the legality of the assessment orders.

2. Challenge to the Pre-Reassessment Notice Dated 06.07.2018:
The petitioner challenged the pre-reassessment notice issued by the State Tax Officer for the assessment year 2012-13. The court noted that the petitioner must respond to the notice within the stipulated time. The proceedings under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006, cannot be scuttled, and the petitioner was directed to file a detailed reply to the notice within thirty days.

3. Legality of Assessment Orders for the Years 2011-12, 2012-13, and 2013-14:
The assessment orders were based on statements recorded from the petitioner's factory managers and the input-output ratio. The petitioner had previously filed writ petitions challenging these orders, which were dismissed by a Single Judge, directing the petitioner to file a statutory appeal. The Division Bench upheld this decision but allowed the petitioner to file an appeal with a 25% pre-deposit of the tax demanded. The Supreme Court also directed the petitioner to approach the statutory authority under Section 58 of the Tamil Nadu Value Added Tax Act, 2006.

4. Compliance with Statutory Appeal Procedures and Timelines:
The petitioner was required to file statutory appeals within a specified period, as directed by the Division Bench and the Supreme Court. The petitioner complied by filing appeals and depositing 25% of the tax demanded. The court emphasized that the petitioner must adhere to the time limits set by the competent courts and that any delay in the proceedings was not attributable to the department.

5. Allegations of Mala Fide Intentions by the Assessing Officer:
The petitioner alleged that the assessment orders were devoid of any application of mind and indicated mala fide intentions by the Assessing Officer. The court noted that these allegations were recorded in the Division Bench's order but did not find sufficient grounds to appoint an arbitrator or quash the assessment orders based on these allegations.

6. Validity of Recovery Proceedings Initiated by the Department:
The department initiated recovery proceedings for the balance amount since only 25% of the tax was deposited by the petitioner. The Single Judge quashed the recovery proceedings, directing the appellate authority to pass orders within three months. The court reiterated that the petitioner must cooperate with the appellate authority in deciding the appeals within the stipulated period.

7. Request for Arbitration Similar to the Case of Madras Cements Limited:
The petitioner requested the appointment of a Joint Commissioner to review the assessment orders, similar to the relief granted in the case of Madras Cements Limited. The court noted that the provisions of the Tamil Nadu Value Added Tax Act, 2006, do not provide for such an appointment and that the case of Madras Cements Limited involved a deviation proposal, which was not applicable in the petitioner's case.

8. Precedent Cases and Their Applicability to the Current Case:
The petitioner cited several precedent cases to support their arguments regarding compliance with court orders and the appointment of an arbitrator. The court found that these cases, primarily related to service law, were not applicable to the taxing enactments and that no prejudice was caused to the petitioner due to the purported delay. The court emphasized that the petitioner must comply with the statutory provisions and the directions of the appellate authorities.

Conclusion:
The court dismissed the writ petitions, directing the petitioner to file a detailed reply to the pre-revision notice within thirty days. The State Tax Officer was instructed to pass appropriate orders on merits and in accordance with the law, preferably within six months. The court found no merits in the petitioner's request for the appointment of a Joint Commissioner or in the challenge to the pre-revision notice. No costs were awarded, and the connected miscellaneous petitions were closed.

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