2016 (6) TMI 343 - HC - VAT and Sales Tax

Final order passed during pendency of assessment order on the recommendation of higher authority in the earlier order - Escaped assessment order - Direction to pay 15% as if suppression is made - Amount increased without any notice to the petitioner - Held that - by following the order of the Honourable Division Bench of this Court and the learned Single Judge of this Court this Court finds that when the authorities passed an order on the basis of the recommendation or the finding of a superior officer, the order passed without application of mind independently, is vitiated. Here, now the petitioner paid the tax to the tune of ₹ 10,00,000/- and the demand made by the bank account and further agreed to pay another sum of ₹ 5,00,000/-. In view of the same, this Court is of the view that the matter could be remitted back to the original authority for fresh consideration and the original authority shall pass appropriate orders after giving a notice to the petitioner and will decide the matter independently de hors the decision of the appellate authority. Accordingly, the order impugned in the second writ petition is set aside. - Matter remitted back

Summary

Issues:
Challenging assessment order, consideration of escaped assessment, application of mind by authority, remittance of matter back for fresh consideration.

Analysis:
The High Court of Madras heard two writ petitions challenging an assessment order. The main contention was that the assessment order was challenged due to an alleged discrepancy in the amount without proper notice to the petitioner. The petitioner contended that the final order was passed without independent application of mind but merely following the decision of a senior authority. The petitioner had paid a portion of the tax amount and agreed to pay the remaining sum. The respondents argued that the authority considered the fact of escaped assessment based on the petitioner's acceptance of unreported sales. The Court noted discrepancies in the filing process and the lack of notice to the petitioner before passing the order. The Court found that passing an order based solely on a superior officer's recommendation without independent assessment was flawed, following previous judgments. The Court decided to remit the matter back to the original authority for fresh consideration, instructing them to give the petitioner a chance to explain, consider physical filing, and pass orders in accordance with the law. The petitioner was directed to deposit a specified sum within a set timeframe for the matter to be remitted back. The first writ petition was dismissed as infructuous in light of the decision on the second writ petition.