2019 (6) TMI 940 - HC - VAT and Sales Tax

Validity of assessment order - primary and pivotal submission made by learned counsel for writ petitioner is that a perusal of the impugned assessment orders made by the first respondent, would reveal that the first respondent has not made any independent assessment and the first respondent has merely accepted the proposal given by the enforcement wing - writ petitioner assessee has not availed of the opportunity given to the writ petitioner for filing documentary evidence - HELD THAT - There is no elaboration whatsoever as to why the assessing authority has accepted the proposal given by the enforcement wing. In other words, there is nothing in the impugned assessment orders to show what weighed the mind of the assessing officer to accept the proposal given by the enforcement wing. In the absence of such discussion, it follows as an inevitable sequitur that there is nothing in the impugned orders to say that the first respondent has applied his / her mind independently ie., independent of the proposal of the enforcement wing. Without embarking upon the exercise of ascertaining whether the first respondent has applied his / her mind independent of the proposal given by the enforcement wing, suffice to say that nothing has been recorded in the impugned assessment orders to show that there is independent application of mind qua proposal given by enforcement wing. Impugned order are set aside on the sole ground of not making assessment independent of the proposal of the enforcement wing / not giving reasons for accepting enforcement wing proposal - the first respondent shall redo the assessments for all the seven years in accordance with law - petition disposed off.

Summary

Issues:
- Assessment orders solely based on proposal without independent assessment
- Failure to provide reasons for accepting enforcement wing proposal
- Applicability of Narasu's principle in absence of objections by assessee

Analysis:
1. The judgment addressed seven writ petitions under the Tamil Nadu Value Added Tax Act 2006, where the primary contention was the lack of independent assessment by the first respondent. The petitioner argued that the assessing officer merely accepted the proposal by the enforcement wing without providing reasons for doing so.

2. The petitioner, a mobile phone shop owner, claimed to be an unregistered dealer with an annual turnover below ?5,00,000. The enforcement wing proposed assessments based on alleged suppression of purchase details during a surprise inspection. Subsequently, the first respondent issued notices to the petitioner, who failed to produce necessary documents or avail of a personal hearing.

3. The petitioner's counsel relied on the Narasu's principle, emphasizing the need for the assessing officer to independently apply their mind during assessments. The judgment cited instances where the assessing officer's reliance solely on the enforcement wing's proposal was deemed inappropriate.

4. Despite the petitioner's failure to file objections or submit documents, the court found the assessment orders lacking in discussion and reasoning. Consequently, the court set aside the orders due to the absence of independent assessment and directed the first respondent to reevaluate the assessments in accordance with Narasu's principle.

5. The court clarified that the petitioner's non-compliance with the opportunity to object did not preclude the application of Narasu's principle in this case. The first respondent was instructed to issue fresh notices, allow objections with supporting documents, and conduct assessments within a specified timeframe, ensuring compliance with legal procedures.

6. Additionally, the court noted the petitioner's business status as a sole proprietor despite the partnership firm designation in the petition. The judgment concluded by disposing of the writ petitions with directions for reassessment, emphasizing adherence to legal principles and procedural fairness without imposing costs on the parties involved.