2016 (7) TMI 77 - HC - VAT and Sales Tax

Validity of revised assessment order - the appellant preferred the Writ Petition by alleging that the first respondent being influenced by the report or direction of his higher officials or the enforcement wing officials, without applying his independent mind, made the revised assessment and passed the impugned order. - TNVAT - Held that - where there is a mechanism for redressal by way of filing an appeal before the appellate authority, especially, in the case of assessment and re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper order passed by the revenue authority, the assessee could not be permitted to abandon the machinery and invoke the jurisdiction of High Court under Article 226 of the Constitution of India. The assessee can very well approach the appellate authority and raise all the grounds urged before this Hon ble Court. - The Writ Appeal fails and the same is dismissed - Decided against the assessee.

Issues Involved:

1. Alleged stock variation arrived at by the inspecting officials.
2. Assessing Authority's decision based on higher officials' report without independent application of mind.
3. Consideration of objections filed by the appellant.
4. Adoption of formula methodology in terms of money value contrary to High Court decisions.
5. Maintainability of the Writ Petition under Article 226 of the Constitution without exhausting alternative remedy.

Detailed Analysis:

1. Alleged Stock Variation:
The appellant, a dealer of fly ash bricks and asbestos sheets, reported a total turnover of ?57,07,41,717 and taxable turnover of ?56,95,31,912 for the year 2011-12, claiming an exemption of ?12,09,805 in their monthly return. The accounts were assessed under the deemed assessment scheme under Section 22(2) of the TNVAT Act. Discrepancies in stock were found by enforcement officials during an inspection, prompting the first respondent to propose a revised assessment. The appellant objected to the alleged excess stock of manufactured goods and the formula used to arrive at the sale value and probable omissions.

2. Assessing Authority's Decision:
The appellant contended that the first respondent followed the report of the second and third respondents without applying his independent mind. The Assessing Authority adopted a gross profit margin of 23.62% from the appellant's audited Profit and Loss Account of 2010-2011 to determine the alleged variation discrepancy, which led to the revised assessment.

3. Consideration of Objections:
The appellant filed detailed objections on 2.9.2015, including documents supporting their claims regarding stock variation and gross profit percentage. They also objected to the proposed penalty of 150%. Despite these objections and a personal hearing in October 2015, the first respondent confirmed the revised assessment on 18.1.2016, allegedly without considering the objections, resulting in a non-speaking and cryptic order.

4. Adoption of Formula Methodology:
The appellant argued that the formula methodology used to determine money value was contrary to decisions of the High Court. They cited several judgments emphasizing that a quasi-judicial authority must apply an independent mind and not be influenced by higher officials' reports.

5. Maintainability of the Writ Petition:
The respondents argued that the Writ Petition was not maintainable under Article 226 of the Constitution as the appellant had not exhausted the alternative remedy of appealing to the appellate authority. The Writ Court dismissed the petition, observing that the appellant could challenge the impugned order before the appellate authority.

Judgment:
The court emphasized the principle that when a statutory forum is available for redressal of grievances, a writ petition should not be entertained. The appellant should have approached the appellate authority to resolve the disputed facts and issues. The court cited several precedents supporting this view, including judgments from the Supreme Court and Division Benches of the High Court, which held that bypassing the alternative remedy is not permissible unless there are exceptional circumstances such as violation of natural justice or fundamental principles of judicial procedure.

Conclusion:
The Writ Appeal was dismissed, and the appellant was granted liberty to file an appeal within four weeks. The appellate authority was directed to consider the appeal on merits independently, without being influenced by the court's observations. No costs were awarded, and the connected Civil Miscellaneous Petition was closed.

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