2020 (9) TMI 47 - HC - VAT and Sales Tax

Validity of assessment proceedings - proceedings made on the basis of the Audit Reports/Inspection Proposals proceeded from the Enforcement Wing or from ISIC Authorities - applicability of Circular No.3 dated 18.01.2019 - HELD THAT - The Commissioner of State Tax, Chennai had issued Circular No.3 dated 18.01.2019, empowering the Assessing Authority to deviate from the proposals, without seeking for approval from the Enforcement Wing/ISIC Authorities - the Circular has empowered the Assessing Officers to henceforth independently deal with the assessment without being influenced by the proposals of the higher officials. In view of Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai, the impugned proceeding in this Writ Petition, which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, is set aside and consequently, the matter is remanded back to the Assessing Officer - Petition allowed by way of remand.

Summary

Issues Involved:
- Impugned proceeding based on Audit Reports/Inspection Proposals from Enforcement Wing or ISIC Authorities
- Assessing Officer's independence in considering proposals
- Validity of Circular No.3 dated 18.01.2019 empowering Assessing Authority

Analysis:

1. Impugned proceeding based on Audit Reports/Inspection Proposals: The petitioner raised a concern that the Assessing Officer did not independently apply his mind but relied on reports and proposals from higher authorities like the Enforcement Wing or ISIC Authorities. The court noted that previous judgments emphasized the Assessing Officer's obligation to assess independently without being solely guided by higher authority proposals. This issue led to the consideration of Circular No.3 dated 18.01.2019, which empowered Assessing Officers to deviate from such proposals without seeking approval.

2. Assessing Officer's independence in considering proposals: The court cited cases where it was held that Assessing Officers must not be influenced by proposals from higher officials and should evaluate matters independently. The Circular issued by the Commissioner of State Tax further reinforced this principle by allowing Assessing Authorities to finalize assessments without seeking approval if they find the proposals not in line with the law or established principles. This directive aimed to ensure that Assessing Officers exercise their judgment objectively and in accordance with legal standards.

3. Validity of Circular No.3 dated 18.01.2019 empowering Assessing Authority: The Circular issued by the Commissioner of State Tax was deemed significant in the judgment as it granted Assessing Officers the authority to deviate from proposals received from Enforcement Wing or ISIC Authorities. The court upheld the Circular's validity and directed the Assessing Officer in the present case to independently handle the assessment proceedings without being influenced by previous proposals. This directive aimed to promote fairness, transparency, and adherence to legal principles in the assessment process.

In conclusion, the judgment allowed the Writ Petition, setting aside the impugned proceeding and remanding the matter back to the Assessing Officer. The Assessee was granted the opportunity to file objections within a specified timeframe, and the Assessing Officer was directed to conduct the assessment independently, following the principles outlined in the Circular and previous court decisions. The judgment emphasized the importance of Assessing Officers exercising their judgment objectively and in compliance with legal standards, ensuring a fair and transparent assessment process.