2016 (9) TMI 1009 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act 2006 - surprise inspection conducted by the Officials of the Enforcement Wing at the place of petitioner s business premises - report filed by the Deputy Commissioner (CT) Enforcement South dated 21.09.2011 pointing out certain defects - deviation proposal subitted by assessing officer disagreeing with the views expressed by the Deputy Commissioner (CT) Enforcement South dated 21.09.2011 - the Deputy Commissioner (CT) Enforcement South in response to the deviation proposal issued a two line order directing the respondent/Assessing Officer to comply with his communication dated 21.09.2011 - is the assessment made by the assessing officer merely on the basis of proposal sent by enforcement wing is justified and the assessment order issued is valid? Held that - the Assessing Officer under the Act has been conferred powers to independently consider the matter and at best the information furnished by the Enforcement Wing or Inspecting Officer could be considered to be in the nature of a first information and based on such information if the Assessing Officer proposes to issue a show cause notice then he is required to call for explanation from the dealer and then it is incumbent upon the Assessing Officer to give his/her own independent reasons and to pass orders either accepting the case of the dealer or rejecting it. However this basic principle as to how the assessment has to be made has not been followed in the instant cases and since the assessment has been made by the respondent/Assessing Officer blindly accepting the proposal sent by the Deputy Commissioner (CT) Enforcement South the impugned orders have to be held to be not sustainable calling for interference. Order of assessment quashed - matter remanded to the respondent for fresh consideration who shall independently consider the petitioner s objection without being in any manner influenced by the proposal sent by the Deputy Commissioner (CT) Enforcement South dated 21.09.2011 and redo the assessment after affording opportunity of personal hearing to the petitioner - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for the years 2009-10, 2010-11, and 2011-12.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, challenged assessment orders for the mentioned years. A surprise inspection led to the Deputy Commissioner pointing out defects, following which the Assessing Officer issued a notice for reassessment. The petitioner raised objections, and the Assessing Officer sent a deviation proposal, disagreeing with the Deputy Commissioner's views. The court noted the importance of Assessing Officers exercising independent powers and granted interim stay due to concerns over the assessment process.

The court criticized the Deputy Commissioner's directive to comply with the 2011 communication without proper legal guidance, emphasizing the Assessing Officer's duty to independently assess. Previous case law highlighted that Assessing Officers must not blindly follow higher authorities but apply their own judgment. The court stressed that while Enforcement Wing reports can prompt inquiries, final decisions must be based on independent assessment and reasoning by the Assessing Officer.

The court referred to a case where it was held that Assessing Officers should not solely rely on higher authority directions, emphasizing the need for independent consideration of dealer objections. The Assessing Officer's blind acceptance of the Deputy Commissioner's proposal was deemed unsustainable, leading to the quashing of the impugned orders and remand for fresh consideration. The court directed the Assessing Officer to reevaluate the objections independently, without influence from the Deputy Commissioner's proposal, and provide the petitioner with a personal hearing.

In conclusion, the court allowed the Writ Petitions, quashed the impugned orders, and remanded the matter for fresh consideration. The Assessing Officer was instructed to independently review the petitioner's objections and redo the assessment without being influenced by the Deputy Commissioner's proposal.