2018 (10) TMI 384 - HC - VAT and Sales Tax

Maintainability of appeal - alternative statutory remedy available - Validity of assessments order - TNVAT Act - challenge mainly on the ground that Assessing Officer did not adhere to the directions/observations made by this Court in the earlier round of litigation - Held that - Availability of an alternate remedy is not always a universal bar for this Court to exercise its extraordinary jurisdiction under Article 226 of The Constitution of India, since the remedy is discretionary. Thus, we are required to examine, in the instant case, as to whether the case would fall under any of the exceptions, which have been carved out, for which purpose, we have to peruse the impugned assessment orders in the present writ petitions for the subject assessment years. On a perusal of the impugned assessment orders in the present writ petitions, we find that the Assessing Officer did not apply his mind before passing the orders - The only reason assigned by the Assessing Officer was that the assessee admitted the discrepancies at the time of inspection before the Inspecting Officers. Time and again, this Court held that the alleged statement recorded before the Inspecting Officers cannot be used against the assessee when the assessment is sought to be reopened and even after the dealer submits their reply/objections to the revision of assessment. If the assessment orders, which were impugned in the present writ petitions, are allowed to stand, then it will tantamount to grant of approval to an illegal order. The assessment orders, which were impugned in the present writ petitions, are clear outcome of total non application of mind and non consideration of the objections filed by the dealer. The orders of assessment made in the present writ petitions have been passed in total violation of the principles of natural justice and that they are in defiance of the fundamental principles of quasi judicial procedure and are out come of total non application of mind - the cases fall within the exceptions carved out by the Hon ble Supreme Court wherein it has been held that the Court can exercise its discretionary power under Article 226 of The Constitution of India. The matters are remanded to the Assessing Officer to redo the assessments - appeal allowed by way of remand.

Summary

Issues:
Challenging assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for the years 2011-12 to 2014-15. Adherence to court directions in previous litigation. Violation of principles of natural justice in assessment process. Availability of alternate remedy under Section 51 of the Act. Judicial review of assessment orders.

Analysis:
The appeals were against assessment orders for the years 2011-12 to 2014-15. The appellant challenged the orders for not following court directions from previous litigation. The court had directed the Assessing Officer to redo the assessment process and adhere to specific guidelines. However, in the subsequent batch of cases, the appellant claimed non-compliance with earlier guidelines, lack of natural justice, and failure to consider explanations. The Writ Court dismissed the petitions, citing the availability of an appeal under Section 51 of the Act as an alternate remedy. The court referred to Supreme Court decisions emphasizing exhausting statutory remedies before approaching Constitutional Courts.

Upon hearing arguments, the judges noted the general principle that parties should exhaust alternate remedies, especially in tax cases. However, exceptions exist when fundamental principles of judicial procedure are violated. The court examined the impugned assessment orders and found critical flaws. The Assessing Officer failed to apply proper scrutiny, merely repeating notices and objections without substantive analysis. The court emphasized that statements made during inspection cannot be sole grounds for reassessment.

Referring to a previous case, the court highlighted that Assessing Officers are not bound by higher authority instructions and must exercise independent judgment. The current assessment orders demonstrated a lack of application of mind, non-consideration of objections, and failure to provide necessary details for verification. The judges concluded that the orders violated natural justice principles and warranted judicial intervention under Article 226 of the Constitution.

As a result, the court allowed the appeals, set aside the previous order, and remanded the matters to the Assessing Officer for reassessment. The Assessing Officer was directed to provide full details, consider objections, conduct a fair hearing, and redo the assessment in compliance with the law. The court emphasized the importance of due process and set a framework for a proper reassessment process.