2022 (10) TMI 730 - HC - VAT and Sales Tax

Validity of assessment order - reversal of proposed turnover - it is alleged that entire accounts of the appellant are required to be verified - Sections 27(1)(a) of the TNVAT Act - HELD THAT - Earlier, the respondent passed the revised orders of assessment and the same were subjected to challenge before the Appellate Authority, who in turn, allowed the appeals and remanded the matters to the respondent for fresh consideration. Thereafter, notices were issued by the respondent, but the appellant did not respond to the respondent. Thereafter, the respondent passed the revised orders of assessment dated 04.05.2021, 16.04.2021 and 08.06.2021, for the assessment years in question, which were impugned in the writ petitions filed by the appellant. It is evident from the revised orders of assessment that though the notices were received, the appellant has not filed their reply or any supporting documents to substantiate their claim, which compelled the assessing officer to confirm the earlier revised orders of assessment. The reasons adduced by the appellant for non-submission of the documents are that on receipt of the notices for re-assessment, they had entrusted the matter to their Accountant, who was not in a position to submit the documentary evidence, as he had contracted Covid-19 infection and hospitalised, which fact was not aware of the appellant. When the same was brought to the notice of the respondent and an opportunity was requested for production of the documentary evidence by the appellant, the respondent refused to accept the same and passed the revised orders of assessment. The said orders were also confirmed by the learned Judge, by dismissing the writ petitions on the ground of availability of alternative appeal remedy to the appellant. Having regard to the explanation given by the learned counsel for the appellant for non-submission of the documentary evidence before the respondent at the time of reassessment proceedings, which appear to be reasonable, this Court, to meet the ends of justice, is inclined to grant one more opportunity to the appellant to substantiate their claim by producing the required documentary evidence to the respondent, for which, there is no serious objection on the side of the respondent - the revised orders of assessment, which were impugned in the writ petitions, are set aside and the matters are remanded to the respondent for fresh consideration - Appeal disposed off.

Summary

Issues:
Challenging dismissal of writ petitions against revised assessment orders due to non-submission of documents by the appellant.

Analysis:
1. The appellant, a registered dealer under the TNVAT Act engaged in wholesale and retail trading of biscuits, submitted returns for assessment years 2012-2013 to 2014-2015. The respondent initially accepted the turnover reported by the appellant under deemed assessment but later scrutinized the returns under Section 22(3) of the Act, issuing show cause notices for detailed verification. The respondent subsequently reversed the turnover and imposed taxes and penalties, citing non-submission of documents by the appellant.

2. The appellant, attributing the non-submission to their Accountant's health issues, requested a review of the assessment orders, enclosing medical certificates. The writ petitions invoking Article 226 of the Constitution sought to quash the revised assessment orders. However, the learned Judge dismissed the petitions, emphasizing the appellant's recourse to the appellate authority for appeal against the assessment orders, highlighting the need to explain any delays due to exceptional circumstances like COVID-19 or medical grounds.

3. The appellant contended that the non-submission of documents was not deliberate, as they believed their Accountant had provided the necessary evidence to the respondent. They engaged a new accountant to rectify the situation and expressed readiness to comply with the defects pointed out. The appellant sought the writ appeals' allowance to set aside the impugned order.

4. The Government Advocate representing the respondent argued that the impugned orders were appealable, and the appellant should have pursued statutory remedies instead of resorting to writ petitions under Article 226. The learned Judge upheld the dismissal of the writ petitions, stating no illegality in the decision and no need for court intervention.

5. Upon review, the High Court noted that the appellant had not responded to the notices for re-assessment or provided supporting documents, leading to the confirmation of the revised assessment orders. Acknowledging the reasonable explanation for non-submission due to the Accountant's health issues, the Court granted the appellant one more opportunity to produce the required documentary evidence to the respondent for fresh consideration, setting aside the impugned order and remanding the matters for reevaluation.

6. The Court directed the appellant to submit the evidence by a specified date, with the respondent instructed to reconsider the matter and issue appropriate orders within a set timeframe. Failure to comply would result in the restoration of the revised assessment orders. The writ appeals were disposed of accordingly, with no costs imposed, and the connected miscellaneous petitions closed.