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THE HONOURABLE DR. JUSTICE ANITA SUMANTH   W.P.Nos.11486 & 11494 of 2019 & WMP.No.11754 of 2019 TVL POS Hyundai Steel Mfg. India Private Limited, Rep. by its General Manager – Finance & Accounts, order. It is made clear that the time lines, as set out above, shall be strictly adhered to by both the parties.   If assessment proceedings are not completed on or before 22.08.2022 despite co-operation by the petitioner/assessee, the entirety of the amount that recovered from the bank account, along with interest, shall be refunded on the very next day i.e. on 23.08.2022.

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

 

DATED: 12.07.2022

 

CORAM

 

THE HONOURABLE DR. JUSTICE ANITA SUMANTH

 

W.P.Nos.11486 & 11494 of 2019 &

WMP.No.11754 of 2019

 

TVL POS Hyundai Steel Mfg. India Private Limited,

Rep. by its General Manager – Finance & Accounts,

Mr.R.Prakash, No.F.70, SIPCOT Industrial Park,

Irrugatukottai, Sriperumbudur-602 117.

… Petitioner in both W.P.’s

 

Vs

Assistant Commissioner (ST),

Pondy Bazaar Assessment Circle,

No.66, Pasumpon Muthuramlingam Salai,

Taluk Office Building,

3rd Floor, R.A. Puram, Chennai – 28.

… Respondent in both W.P.’s

 

PRAYER in W.P.No.11486 of 2019: Writ Petition filed under Article 226 of the Constitution of India, to issue Writ of Certiorari, calling for the records pertaining to the impugned notice dated 18.03.2019 passed in TIN/33641521427/2015-16 issued by the respondent and quash the same.

 

PRAYER in W.P.No.11494 of 2019: Writ Petition filed under Article 226 of the Constitution of India, to issue Writ of Mandamus, directing the respondent to refund an amount of Rs.85,88,662/- along with applicable interest as requested by the petitioner in their letters dated 11.01.2017 and 20.02.2017.

(For both W.P.’s)

For Petitioner       :            Mr.L.Gokul Raj

for Mr.Hari Radhakrishnan

 

For Respondent   :            Mr.V.Prashanth Kiran

Government Advocate

 

C O M M O N  O R D E R

Heard Mr.L.Gokul Raj, learned counsel representing Mr.Hari Radhakrishnan, learned counsel on record for the petitioner and Mr.V.Prashanth Kiran, learned Government Advocate for the respondent.

2.This common order disposes both Writ Petitions filed by the petitioner, W.P.No.11486 of 2019 challenging a notice issued by the respondent dated 18.03.2019 and W.P.No.11494 of 2019 seeking a mandamus directing the respondent to refund an amount of Rs.85,88,662/- with interest as requested by the petitioner under letters dated 11.01.2017 and 20.02.2017.

3.The assessment in this case was framed on 30.09.2016 for the period 2015-2016 in terms of the provisions of the Tamil Nadu Value Added Tax Act, 2006 (in short ‘TNVAT Act’). As against the assessment, the petitioner has filed a first appeal before the Appellate Deputy Commissioner (CT), Chennai Central by paying the statutory pre-deposit of 25% of the disputed tax.

4.An order came to be passed by the First Appellate Authority on 08.12.2016, wherein, he remands the matter to the file of the Assessing Authority. A perusal of the order of the first Appellate Authority indicates that he was of the view that the assessment was not framed in proper perspective. There had been a visit/inspection by the enforcement based upon which the original assessment dated 30.09.2016 had been framed.

  1. The appellate authority was of the view that there was undue and disproportionate reliance upon the report/proposals of the enforcement authorities and not enough independent application of mind by the authority. While an assessing officer is certainly entitled to refer to the findings and observations of the enforcement authorities, the finalisation of the assessment must be on his own initiative and application of mind.
  2. The assessment must be a function of the independent labour of the assessing officer rather than containing mere reference to the materials found by enforcement and their conclusions. This is the correct position of law as settled by this Court in the cases of Jayalakshmi Oil Mills Vs. The State of Tamil Nadu [(2013) 58 VST 535] and Sri Ramu Furniture Co. Vs. The State of Tamil Nadu [(2013) 57 VST 383] and S.V.Cycles Stores Vs. Commercial Tax Officer [(2011) 46 VST 565].
  3. The order of the appellate authority is detailed and the operative portion reads thus:

“19. It is perceptible from the impugned order that the assessing authority had passed the impugned order influenced by the Enforcement Officers report without considering the objections and the materials filed by the appellant. The assessing authority being a quasi judicial authority ought to have scrutinized the objections carefully and in proper perspective uninfluenced by the Enforcement Officers audit report as held by the Hon’ble Madras High Court in S.Shivji and Co., vs. Joint Commercial Tax Officer reported in (1965) 16 STC 769. In State of Tamil Nadu vs. A.N.S. Guptha and Sons reported in (2011) 38 VST 45 (Mad.), the Hon’ble Madras High Court has held as follows:

“We are completely in agreement that the assessment proceedings arc quasi judicial in nature and therefore, the assessing authority has an independent y carefully scrutinize the materials for assessment and satisfy himself thoroughly, uninfluenced by any direction of superior officers and assess the tax payable on that basis. In the present case, as rightly pointed out by the Tribunal, the assessing officer cannot simply taking into consideration the report of the Enforcement Wing has not applied its mind, but simply has been carried away by the report of the Enforcement Wing and has come to the conclusion. As stated earlier, the assessing officer should have decided the matter on the merits, independently unbiased and uninfluenced by any other subsequent factors and also should not have stated that it is not a court of law”.

  1. In view of the aforesaid findings, I am inclined to set aside the sales suppression of Rs.6,82,64,524/-taxable at 5% determined by the assessing authority based on the excess stock difference and remit back to the assessing authority with the direction to re-do the stock reconciliation in the light of the findings recorded supra and resort to reassessment in accordance with law. In the result, this part of the appeal is remanded.”
  2. Pursuant to the remand, the petitioner has received the impugned notice dated 18.03.2019, calling upon it to file its objections to the assessment proposals with supporting records. Though styled as notice, the impugned communication, conveys as much finality as an order and the petitioner thus apprehends that the officer has pre-determined the issues.
  3. That apart, the officer proceeds to reiterate his earlier reliance upon the enforcement proposals, in a way, defying the observations of the appellate authority in regard to the proper manner by which an assessment ought to be framed. To my mind, the principles of judicial discipline have not been adhered to by the respondent and the impugned notice, and the contents thereof, run counter to the explicit directions of the appellate authority in his order dated 08.12.2016. The respondent would do well to bear in mind the principles enunciated in the celebrated case of Union of India and others vs Kamalakshi Finance Corporation [1991 (55) ELT 433 SC], to following effect:

“The mere fact that the order of the appellate authority is not “acceptable” to the department – in itself an objectionable phrase – and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.”

  1. However, seeing as the communication impugned is a notice it would be appropriate for the petitioner to appear before the Authority and make its case. The Assessing Authority will ensure that the proceedings before him are completed in close compliance with the observations and conclusions of the Appellate Authority.
  2. For this purpose, the petitioner will appear before the Appellate Authority on 22.07.2022 at 10.30 a.m. along with its written reply and supporting documents without awaiting any fresh notice in this regard. After hearing the petitioner and considering the documents filed, if any, an order of assessment shall be passed de novo within a period of four (4) weeks from 22.07.2022, i.e. on or before 22.08.2022.
  3. Coming to the mandamus sought in W.P.No.11494 of 2019, proceedings for recovery had been initiated by issuance of Form-U to the Bank on 22.11.2016. Parallelly, and as a separate proceeding, the appeal against the original order of assessment had been disposed by the first Appellate Authority on 08.12.2016.
  4. The appellate order had been received by the Assessing Authority only on 28.02.2017. In the meanwhile, based upon the Form-U issued to the Bank, the Bank had handed over the Demand Draft to the Assessing Authority on 09.12.2016 that had been sent for encashment on 12.12.2016 and encashed on 20.12.2016
  5. Hence, I find no irregularity in the procedure followed. Though the proceedings for recovery are unfortunate seeing as the original order of assessment has been set aside and remanded for de novo consideration, I have, in the preceding paragraphs, set a time frame for completion of the proceedings in remand. Thus, and as the conclusion of the de novo proceedings is imminent, mandamus, as sought for, is not issued now.
  6. It is made clear that the time lines, as set out above, shall be strictly adhered to by both the parties.   If assessment proceedings are not completed on or before 22.08.2022 despite co-operation by the petitioner/assessee, the entirety of the amount that recovered from the bank account, along with interest, shall be refunded on the very next day i.e. on 23.08.2022.
  7. 1 These Writ Petitions are disposed as above. No costs. Consequently, connected Miscellaneous Petition is closed.

 

kbs                                                                                                 12.07.2022

 

Index     : Yes

Speaking Order

 

To

 

Assistant Commissioner (ST),

Pondy Bazaar Assessment Circle,

No.66, Pasumpon Muthuramlingam Salai,

Taluk Office Building,

3rd Floor, R.A. Puram, Chennai – 28.
DR.ANITA SUMANTH, J.

 

kbs

 

 

 

 

 

 

 

 

 

 

 

 

W.P.Nos.11486 & 11494 of 2019 &

WMP.No.11754 of 2019

 

 

 

 

 

 

 

 

12.07.2022

 

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