2016 (11) TMI 298 - HC - VAT and Sales Tax

Reversal of ITC - Escape assessment - Demand - Penalty - Pre-assessment notice - Held that - in the impugned final assessment order is not able to show any line of reason as to how the petitioner deserved the reversal of ITC and also how the petitioner has committed any error in respect of levy of purchase tax under Section 12 of the Act - there is no logical finding on the part of the Authority to conclude against the petitioner de hors the objections raised by him is inclined to set aside the impugned pre-assessment order. Regarding escape assessment and penalty - In this case as rightly pointed out when the objections given by the petitioner to the pre-assessment notice dated 11.12.2015 that the respondent ought to have issued notice of assessment under Central Sales Tax Act 1956 separately since it is a different enactment nowhere the Commercial Tax Officer has answered the same. This Court finds it difficult to accept the said proposal for the reason that the impugned was passed without a final conclusion by the Commercial Tax Officer Theni-II Assessment Circle - At any rate being a quasi judicial authority when pre-assessment notice was issued relating to the estimated turnover of Rs. 8, 70, 258/- the petitioner should have been given an opportunity to show cause for levying of taxes and penalty with regard to the turnover - Petition allowed by way of remand.

Summary

Issues:
Challenge to Assessment Order made by Commercial Tax Officer, Theni-II in three writ petitions.

Analysis:
1. W.P.(MD).No.11911 of 2016:
- The petitioner challenged the proceedings issued by the Commercial Tax Officer, Theni-II regarding the taxable turnover for the year 2008-2009 under TNVAT Act. The petitioner argued against the reversal of Input Tax Credit (ITC) based on Section 19(9)(iii) of the Act. The petitioner contended that the order lacked reasoning and did not reflect the application of mind by the authority. The Court found that the order lacked logical findings and set it aside, remitting the matter back to the Commercial Tax Officer for a well-reasoned decision.

2. W.P.(MD).No.11912 of 2016:
- The objections filed by the petitioner were disregarded by the Commercial Tax Officer in the proceedings related to CST No.150249/2008-09. The petitioner argued that separate assessment under the Central Sales Tax Act should have been issued. The Court noted the absence of reasons in the impugned order and set it aside, directing a reconsideration by the Commercial Tax Officer.

3. W.P.(MD).No.11913 of 2016:
- The petitioner challenged the proceedings related to sale suppression, reversal of waste sale, and purchase tax. The Additional Government Pleader argued against quashing the proceedings, stating that the issues were dealt with appropriately. However, the Court found that the impugned order lacked a final conclusion by the Commercial Tax Officer and did not consider the petitioner's objections adequately. Therefore, the Court set aside the order and remitted the matter back for a well-reasoned decision.

In all three cases, the Court emphasized the requirement for a reasoned speaking order by the Commercial Tax Officer, highlighting the importance of logical findings and proper consideration of objections raised by the petitioner. The Court intervened due to the lack of reasoning in the impugned orders and directed the matters to be reconsidered with a focus on providing a well-reasoned decision in accordance with the law.