2017 (12) TMI 205 - HC - VAT and Sales Tax

Waiver of assessment procedure - fire accident occurred in the business premises of the petitioner on 11.01.2002 - petitioner s case is that on account of the fire accident, entire records, books of accounts, etc. which were kept in the office premises were gutted down and are not available with the petitioner for production before the Assessing Officer and therefore, requested for waiver of the assessment procedure - Held that - nothing appears to have been done by the Assessing Officer from 1995 onwards and for the first time action was initiated in the year 2003. Since the fire accident had occurred on 11.01.2002 and the records were gutted as soon as pre-assessment notices were received, the petitioner moved the first respondent through proper channel - to state that the petitioner is guilty of non-production of records at the appropriate time is an incorrect statement since there is no record to show that despite summons being issued to produce the records and books of accounts, the petitioner failed to do so. More importantly, the respondent did not dispute the fire accident and the same is admitted. In such circumstances, every step should be taken by the Assessing Officer as well as other respondents to complete the assessment at an earliest point of time. There is a statutory duty on the part of the third respondent to call upon the petitioner to produce the books of accounts and then finalize the assessment. For reasons best known, this never happened till 2003 and the matter was in limbo from 1995 onwards. Therefore, the petitioner cannot be solely blamed for the situation. The matter is remanded to the third respondent, the Assessing Officer who is directed to waive the assessment procedure as contemplated under Section 12 of the TNGST Act r/w Section 9(2) of the CST Act and complete the assessment for all the assessment years - appeal allowed byway of remand.

Summary

Issues:
Challenge to order passed by first respondent in G.O.Ms.No.68 dated 18.07.2006; Request for waiver of assessment procedure due to fire accident; Rejection of waiver request based on default in producing records; Comparison with relief granted to other assessees; Allegation of suppression; Delay in assessment process; Interpretation of order passed in favor of another company; Consideration of fire accident as force majeure situation.

Analysis:
The petitioner filed a writ petition challenging the order passed by the first respondent in G.O.Ms.No.68 dated 18.07.2006, seeking the direction to complete the assessment for the years 1995-1996 to 2000-2001 under the TNGST Act and CST Act by waiving the assessment procedure due to a fire accident. The petitioner's contention was that records were destroyed in the fire, making them unable to produce documents before the Assessing Officer. The petitioner's request for waiver was based on similar relief granted to other assessees in comparable situations.

The rejection of the petitioner's request was primarily on the grounds of default in producing records, pending matters since 1995, and a substantial tax arrear. However, the court found no evidence of suppression by the petitioner and noted that the Assessing Officer had not taken proactive steps in the assessment process from 1995 onwards. The court emphasized that the fire accident was a force majeure situation beyond the petitioner's control, and the petitioner had fulfilled their statutory duty by filing returns and paying taxes.

The court highlighted the delay in the assessment process, noting that no action was taken by the Assessing Officer until 2003, despite the fire accident occurring in 2002. The court criticized the rejection of the petitioner's request based on an incorrect interpretation of a previous order and concluded that the impugned order was passed on irrelevant considerations, warranting its setting aside. The court remanded the matter to the Assessing Officer to waive the assessment procedure and complete the assessment after providing a personal hearing to the petitioner within twelve weeks.

In conclusion, the court allowed the writ petition, set aside the impugned order, and directed the Assessing Officer to complete the assessment by waiving the procedure, considering the force majeure situation of the fire accident and the petitioner's compliance with statutory duties.