Case Law Details

Case Name : Tvl.Sri.Kumaraguru Traders, Vs The Commercial Tax Officer (Madras High Court)
Appeal Number : W.P.No.12302 of 2017
Date of Judgement/Order : 10/05/2017
Related Assessment Year :

1. The grievance of the petitioner is that when the impugned order of assessment was made based on the Web Report, the Assessing Authority is not justified in passing the impugned order of assessment, without furnishing the details of such report and without conducting any enquiry at all levels.

2. The learned counsel appearing for the petitioner further pointed out that this Court already considered similar issue with regard to the assessment based on web report and found that the assessment order cannot be passed in such a manner and on the other hand, the Assessing Authority has to adopt a centralized mechanism exclusively to deal with the cases of mismatch . The said decision made in WP.No.105 of 2016 , dated 01 .03.2017 has been strongly relied on by the learned counsel for the petitioner.

3. The learned Additional Government Pleader (Tax) is not disputing the fact that the issue involved in this case is covered by the above decision of this Court. Therefore, he submitted that the same order can be passed in this case as well. In the said order, the learned Judge had observed in paragraph 56, 57 and 58 as follows:-

“56. The procedure adopted under the Maharashtra VAT Act appears to be a more reasonable procedure, the Rules have been so designed to constitute independent authorities, who will in exercise jurisdiction to dispose of the objections etc. However, this Court cannot legislate nor direct the State to legislate in a particular passion and it is for the state to bring about and appropriate rules and set procedures so that when discrepancy is noted while comparing the return with that of the figures available with the Department in their web portal, there should be an exercise carried out by the department within its level before calling upon the dealer to show cause. This can be achieved only if there is a centralised mechanism and if the present practice is allowed to prevail, it would only result in multiplicity of proceedings with more number of cases pending before the Courts and Appellate forums, thus jeopardizing the interest of revenue. Therefore, it is high time the Principal Secretary and Commissioner of Commercial Taxes in consultation with him officers lays out a detailed procedure as to how to take forward cases of mismatch, evolve a central mechanism, which can go into these aspect and furnish details in full form to the respective Assessing Officers, who can decide for themselves as to whether there is a case made out to call upon their dealer to explain. If this centralized mechanism is not put in place exclusively for such purpose, it would result in notices and orders being issued by the respective Assessing Officers without even the knowledge of the Assessing Officer of the other end dealer resultantly no action being taken against other end dealer, assuming, he is at fault. Therefore, it is high time the Department wakes up and stops the one way approach and examine the matter in a holistic manner so that the defaulting dealer is brought to books.

57. Hence, for all the above reasons, all the Writ Petitions are allowed and the notices/orders either original or appellate or revisional are set aside and the matters are remanded to the respective Assessing Officers, to undertake a fresh exercise by conducting a thorough enquiry in consultation with the Assessing Officers of the other end dealer for which purpose the Commissioner of Commercial Taxes shall empower the Assessing Officers to seek information from other circles as well and in the mean time to evolve a centralized mechanism to exclusively deal with the cases of mismatch and while doing so, the Principal Commissioner shall take note of the procedures adopted by the other States, more particularly, in Maharastra, Gujarat and Delhi and if any statutory amendments have to be made, make appropriate recommendations to the State Government, and till then to devise a procedure which is fair and reasonable and afford an opportunity to the dealer to put forth his case and establish that he is entitled to the concession/set-off availed.

58. Since these Writ Petitions have been allowed and the impugned orders have been set aside and the matters have been remanded for fresh consideration the petitioners/ dealers are not entitled to raise the plea of limitation, when fresh show cause notices are issued and they are directed to submit their explanation to enable the Assessing Officers to adjudicate their case.”

4. Considering the fact that the issue involved in this case is covered by the above decision made by this Court and considering the fact that the petitioner is also entitled for similar relief in this case, this writ petition is allowed and the impugned order of assessment is set aside. Consequently, the matter is remitted back to the Assessing Authority to redo the assessment after following the procedures/ directions issued by this Court in the above said batch of cases. Needless to say that the Assessing Authority will also provide an opportunity of personal hearing to the petitioner before finalizing the assessment. Such exercise shall be done by the Assessing Authority within a period of eight weeks from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petition is closed.

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