2021 (10) TMI 887 - HC - VAT and Sales Tax

Deemed assessment - assessment of escaped turnover - Section 27 of TNVAT Act - HELD THAT - The order made under Section 27 of TNVAT Act has been called in question inter alia on the ground that Narasus principle being ratio in NARASUS ROLLER FLOUR MILLS VERSUS THE COMMERCIAL TAX OFFICER 2015 (4) TMI 361 - MADRAS HIGH COURT which inturn was made by following an earlier Hon'ble Division Bench judgment in Madras Granites Private Limited Vs. CTO., 2002 (10) TMI 767 - MADRAS HIGH COURT has been given a go by; that it is to be noted that this principle is to the effect that the Assessing Authority exercising best judgment assessment qua alleged escaped assessment should not go solely / blindly by the report of the Enforcement Wing officials and should independently make an assessment. On the short point of Madras Granite and Narasus principles infraction, captioned writ petition is disposed of - impugned Assessment Order is set aside solely on the ground of infraction of Narasus and Madras granite principles (not making the assessment independent of the Enforcement Wing report) without expressing any view or opinion on the other aspects of the matter - Petition disposed off.

Summary

Issues:
Infraction of Narasus and Madras granite principles in assessment order.

Analysis:
The judgment pertains to a writ petition involving the infraction of Narasus and Madras granite principles in an assessment order under the Tamil Nadu Value Added Tax Act, 2006. The petitioner, an authorized distributor of wet and dry X-Ray films, challenged an assessment made by the enforcement wing of the respondent Department under Section 27 of the TNVAT Act, claiming it to be an assessment of escaped turnover. The petitioner contended that the assessment did not adhere to the Narasus principle, which requires the Assessing Authority to independently make an assessment rather than solely relying on the Enforcement Wing's report. The court noted that the matter revolved around a narrow compass and referred to previous judgments in Ponny Stores and Gayathri Agency cases, which were directly applicable and had not been appealed further.

The court, considering the precedents and the principles of Narasus and Madras granite, set aside the impugned assessment order solely on the ground of infraction of these principles. The order directed the respondent to furnish photocopies of the D-7 records to the petitioner and instructed the respondent to conduct a fresh assessment independent of the Enforcement Wing's proposals in accordance with the Narasus and Madras granite principles. The court emphasized that the fresh assessment should be made on its own merits and in compliance with the law. The timeline for completing the reassessment was set within two months from the specified date, ensuring expeditious resolution while allowing sufficient time for due diligence. The writ petition was disposed of accordingly, and the associated miscellaneous petition was closed, with no costs imposed on either party.