2020 (9) TMI 641 - HC - VAT and Sales Tax

Validity of assessment proceedings - allegation is that the impugned proceeding is made on the basis of the Audit Reports/Inspection Proposals proceeded from the Enforement Wing or from ISIC Authorities - HELD THAT - Circular No.3 dated 18.01.2019 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 the Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai, all the impugned proceedings in these Writ Petitions, which proceeds on the basis of the proposals/reports of the Enforcement Wing/ISIC, are set aside and consequently, the matters are remanded back to the Assessing Officer. The Assessees are granted liberty to file their objections with all supporting documents, within a period of 30 days from the date of receipt of a copy of this order. Petition allowed by way of remand.

Summary

Issues Involved:
Impugned proceedings based on Audit Reports/Inspection Proposals from Enforcement Wing or ISIC Authorities, Assessing Officer's independence in decision-making.

Analysis:
The common issue in the Writ Petitions was the reliance of Assessing Officers on reports/proposals from higher authorities without independent consideration. The petitioner contended that the Assessing Officer did not apply his mind independently. Previous judgments by the Court, such as in Madras Granites (P) Ltd. and Narasus Roller Flour Mills, emphasized the necessity for the Assessing Officer to assess independently without being solely guided by higher authority proposals.

The Court upheld the petitioner's argument and referred to Circular No.3 dated 18.01.2019 issued by the Commissioner of State Tax, Chennai. This Circular empowered Assessing Officers to deviate from proposals without approval from higher authorities. The Circular aimed to ensure that Assessing Officers could finalize assessments independently, not influenced by higher officials' proposals.

Consequently, the Court set aside all impugned proceedings based on Enforcement Wing/ISIC proposals and remanded the matters back to the Assessing Officer. Assessees were given 30 days to file objections with supporting documents. The Assessing Officer was directed to provide a personal hearing, possibly through Video Conferencing, and conclude assessments independently within 12 weeks from receiving objections. If no objections were received within 30 days, assessment proceedings were to commence after the specified period.

In conclusion, the Writ Petitions were allowed, and connected Miscellaneous Petitions were closed without costs. The judgment emphasized the importance of Assessing Officers' independence in decision-making and compliance with Circular No.3 to ensure fair assessments based on established legal principles.