2020 (7) TMI 551 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - periods 2011-12 and 2012-13 - allegation is that the impugned assessments are passed entirely upon the report of the officials of the Enforcement Wing and do not reflect any independent application of mind on the part of the Assessing Officer - Circular No.3/2019 - HELD THAT - Even in the case where there is an adverse report by the Enforcement Wing in regard to a particular issue, the Assessing Officer is at liberty and in fact ought to examine the issue independently. This has admittedly not been done in this case. Hence, the impugned orders are quashed and the Writ Petitions allowed.

Summary

Issues:
Challenging assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for the periods 2011-12 and 2012-13.

Analysis:
The judgment delivered by the Madras High Court pertained to two writ petitions challenging assessment orders made under the Tamil Nadu Value Added Tax Act, 2006 for the periods 2011-12 and 2012-13. The learned Special Government Pleader pointed out that the assessments were solely based on the report of officials from the Enforcement Wing, lacking independent evaluation by the Assessing Officer. Referring to Circular No.3/2019, it was highlighted that the Assessing Authority has the discretion to finalize assessments independently, even if there are adverse reports from the Enforcement Wing, provided reasons for deviation are recorded. The court noted that in the present case, the Assessing Officer had not conducted an independent examination of the issues, leading to the quashing of the impugned orders and allowing the writ petitions.

The judgment emphasized that the Assessing Officer is obligated to assess issues independently, especially when there are conflicting reports from enforcement agencies. The court's decision underscored the importance of the Assessing Officer's application of mind in reaching assessment conclusions, rather than solely relying on reports from other departments. By setting aside the assessment orders due to the lack of independent evaluation, the court upheld the principle that assessments must be based on a thorough and individual assessment of the facts and circumstances presented.

Furthermore, the court granted liberty for fresh proceedings to be initiated within six weeks from the date of the order, if necessary. This allowance for a fresh start within a specified timeframe demonstrated the court's commitment to ensuring that assessments are conducted in accordance with the law and established principles. The judgment concluded by closing the connected miscellaneous petitions without imposing any costs, signifying the resolution of the issues raised in the writ petitions challenging the assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for the specified periods.