2017 (10) TMI 1164 - HC - VAT and Sales Tax

Validity of assessment order - TNGST Act - Section 54 of the TNGST Act - opportunity to cross-examine - Held that - without affording an opportunity of cross examination of the other end dealer, there was no scope for the respondent to rely on the material relating to the said dealer for determination of the said liability on the petitioner - petition allowed.

Summary

Issues:
Challenging assessment order under TNGST Act for 1993-94 & 1994-95 - Compliance with court directions in W.P.Nos.2945 & 2946 of 2005.

Analysis:
The petitioner challenged the assessment order under the TNGST Act for the years 1993-94 & 1994-95, questioning compliance with court directions in W.P.Nos.2945 & 2946 of 2005. The Court focused on whether the impugned orders adhered to the directions issued in the previous writ petitions filed by the petitioner challenging the proceedings of the respondent dated 28.12.2004. The Appellate Assistant Commissioner had directed an opportunity for cross-examination to be given to the petitioner regarding the alleged purchase of Refined Sunflower Oil. The court emphasized the powers vested in the assessing authority under Section 54 of the TNGST Act, enabling summoning of individuals and compelling document production.

The Court noted the respondent's failure to fully exercise the powers under Section 54, as evidenced by merely issuing a summons without ensuring the appearance of the concerned dealer. It emphasized that without the dealer's examination, reliance on materials related to the dealer for determining tax liability was improper. Consequently, the Court set aside the impugned orders and directed the respondent to conduct proceedings afresh, ensuring the presence of the dealer for cross-examination, as mandated by Section 54 of the TNGST Act.

The Court reiterated the importance of affording the opportunity for cross-examination to the petitioner, emphasizing that without it, reliance on materials from the dealer in question for determining liability was unjustified. Despite the respondent's attempts to summon the dealer from Karnataka, the dealer's non-appearance rendered reliance on materials collected from Karnataka impermissible. The Court emphasized that the assessment order, based on the dealer's non-appearance, could not be upheld. It clarified that the matter did not need to be remitted to the respondent again, as the Court had previously prohibited reliance on materials from the dealer without affording cross-examination to the petitioner.

As a result, the Court allowed the writ petitions, quashed the impugned orders, and closed the connected miscellaneous petitions, emphasizing the necessity of complying with the directions issued under Section 54 of the TNGST Act and ensuring the opportunity for cross-examination to the petitioner to determine tax liability accurately.