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2019 (6) TMI 1586 - HC - VAT and Sales TaxJurisdiction - power of Joint Commissioner, a lower Authority to order any audit of the particular business dealer - no authorisation or delegation by the Commissioner possible in terms of Section 64(4) of TNVAT Act - HELD THAT:- The provisions of sub-Section (4) of Section 64 empowers the Head of the Department viz., the Commissioner to order for an audit of the business of any registered dealer by an officer not below the rank of the Deputy Commercial Taxes Officer, who is much lower authority in the hierarchy. It is clear that the said sub-section (4) does not empower the Commissioner to delegate the power to pass order to any lower authority. Therefore, the application of mind by the Commissioner himself about the nature of the default by the particular Assessee concerned and therefore there is a need to audit the books of accounts and other revenue records of the business of that Assessee has to be recorded by the Commissioner himself. The words "any registered dealer" in Sub-Section (4) indicates a singular dealer and not a group of Dealers. Therefore, such orders under Section 64(4) cannot be passed for a group of registered dealer in one go. The recording the opinion about the default of the assessee cannot be construed to be an administrative function or administrative order passed by the Commissioner. Therefore, such an order under Section 64(4) of the Act can be nothing but a quasi-judicial order, entailing civil consequences for the Assessee or Dealer concerned. In view of this, the orders to be passed under Section 64(4) of the Act have to meet the principles of natural justice viz., the compliance of the principles of audit alteram partem, giving of a notice and opportunity of hearing to the assessee concerned. The Assessee before the Commissioner can always contend that no such default as stipulated in Section 64(4) clauses (a) to (e) is made out against him and if he places such a case before the learned Commissioner, it is incumbent upon of the Commissioner to apply mind and pass appropriate speaking and reasoned order in this regard. Therefore, passing of an omnibus or general order to audit of business of dealers like done in the present case, does not fit in the scheme of Section 64(4) of the Act at all. The power to delegate further is not provided under Section 64(4) of the Act. Therefore, the manner in which the impugned order dated 16.05.2014, has been passed by the learned Commissioner laying down certain limits or criterias quoted above leaving it free for the Joint Commissioner to authorise officers below to undertake such audit is wholly untenable and unsustainable order - The audit of the books and accounts of an assessee is required not only under the provisions of Section 64 (4) of the Act but such provisions, which may be applicable to the assessee concerned, may be under the other relevant statutes also like the provisions of the Companies Act, if an assessee is a limited Company, under the provisions of the Income Tax Act, vide Section 142(2A) thereof as well. The order of the learned Commissioner under Section 64(4) of the Act is a quasi-judicial order, requiring a prior notice of hearing to the assessee and passing of a reasoned speaking order in individual cases of registered dealers for conducting audit by the specified Authority as directed by the Commissioner. The order dated 16.05.2014 does not meet these requirements of law at all. The Hon'ble Supreme Court in a large number of cases has even held that unless the provisions of the natural justice are specifically excluded by the statutory provisions, they can be read into such provisions in the interest of justice. The provisions in Section 64(4) of the Act do not specify anything about the notice for hearing to the registered dealers but the mere absence of such a provision does not prevent this Court from directing such a requirement to be complied with by the Department viz., Commissioner before directing such audit under Section 64(4) of the Act - A reference for this proposition of law can be made to INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA VERSUS LK. RATNA AND OTHERS [1986 (10) TMI 37 - SUPREME COURT]. Appeal dismissed - decided against Revenue.
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