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2016 (9) TMI 870 - HC - VAT and Sales TaxRejection of order of settlement commission - Tamil Nadu Sales Tax Settlement of Arrears Act 29 of 2011 - procedure to be followed before passing any decision by settlement commission - proper verification of the application as per provision Section 6 of the Act - is the order passed by settlement authority valid which has been passed without following the procedure contemplated under the Act and has lost sight of the object with which the Settlement Act was enacted? - Held that - the decision in the case Cheran Cements Limited Vs Joint Commissioner CT , Trichy Division, Trichy and Another 2014 (11) TMI 878 - MADRAS HIGH COURT is relied upon. No procedures have been followed and the impugned order suffers from very serious procedural defects and this is a good ground to interfere with the impugned order. Matter remanded to the respondent for fresh consideration in terms of the provisions of the Settlement Act, after affording an opportunity of personal hearing to the petitioner to produce Books of Accounts and relevant records for the purpose of verifying the correctness of the particulars furnished by the petitioner in the application made under Section 5 of the Settlement Act and the computation made by the petitioner under Section 7 of the Act. The respondent shall pass final orders, on merits and in accordance with law, within a period of three months - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Challenge to the order passed by the Joint Commissioner [CT], Vellore Division. 2. Compliance with the Tamil Nadu Sales Tax [Settlement of Arrears] Act [29 of 2011]. 3. Verification of the application and determination of the amount payable under Sections 5, 6, and 7 of the Act. 4. Procedural defects and adherence to statutory requirements. Detailed Analysis: 1. Challenge to the Order Passed by the Joint Commissioner [CT], Vellore Division: The petitioner challenged the orders dated 30.03.2015, issued by the Joint Commissioner [CT], Vellore Division, acting as the Designated Authority under the Tamil Nadu Sales Tax [Settlement of Arrears] Act [29 of 2011]. The petitioner filed applications for settlement under Section 5 of the Act, which were processed by the Designated Authority. However, the Designated Authority delved into the merits of the assessment, confirming the reasons assigned by the Assessing Officer, which was beyond the scope of the application for settlement. 2. Compliance with the Tamil Nadu Sales Tax [Settlement of Arrears] Act [29 of 2011]: The Court noted that the Designated Authority failed to follow the procedure outlined in the Act. Specifically, the Designated Authority did not adhere to the requirements of verifying the application under Section 6 of the Act before proceeding further. This deviation from the prescribed procedure was a significant procedural defect. 3. Verification of the Application and Determination of the Amount Payable under Sections 5, 6, and 7 of the Act: The Act mandates a specific process for handling settlement applications: - Section 5: Outlines the application process for settlement, including the requirement for separate applications for each assessment year and the submission of proof of payment at the rates specified in Section 7. - Section 6: Requires the Designated Authority to verify the correctness of the particulars in the application and determine the amount payable. If there is a discrepancy not exceeding 10%, the Designated Authority can demand the additional amount; otherwise, the application must be summarily rejected. - Section 7: Specifies the rates for determining the amount payable for different types of arrears. The Court emphasized that the Designated Authority must verify the application against relevant records and determine the correctness of the computation made by the petitioner. The failure to do so in this case was a procedural error. 4. Procedural Defects and Adherence to Statutory Requirements: The Court highlighted that the Designated Authority did not follow the proper procedure, including verifying the application and providing an opportunity for the petitioner to rectify any defects. The Court referenced the case of Cheran Cements Limited, which underscored the importance of adherence to the statutory procedure and the need for fairness and transparency, including the opportunity for a personal hearing if necessary. Conclusion: The Court found that the impugned orders suffered from serious procedural defects and did not comply with the statutory requirements of the Settlement Act. Consequently, the writ petitions were allowed, and the impugned orders were set aside. The matter was remanded to the respondent for fresh consideration in accordance with the provisions of the Settlement Act, including affording the petitioner an opportunity for a personal hearing and verification of the correctness of the particulars furnished in the application. The respondent was directed to pass final orders within three months. No costs were awarded, and connected Miscellaneous Petitions were closed.
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