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2016 (7) TMI 77 - MADRAS HIGH COURT

2016 (7) TMI 77 - MADRAS HIGH COURT - TMI - Validity of revised assessment order - the appellant preferred the Writ Petition by alleging that the first respondent being influenced by the report or direction of his higher officials or the enforcement wing officials, without applying his independent mind, made the revised assessment and passed the impugned order. - TNVAT - Held that:- where there is a mechanism for redressal by way of filing an appeal before the appellate authority, especially, in .....

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gainst the assessee. - Writ Appeal No. 258 of 2016, CMP No. 4359 of 2016 - Dated:- 20-6-2016 - S. Manikumar And D. Krishnakumar, JJ. For the Appellant : Mr.P.Rajkumar For the Respondents : Mr.Kanmani Annamalai JUDGMENT ( Judgment of the Court was delivered by D. Krishnakumar, J ) This Writ Appeal has been filed against the order dated 23.2.2016 passed in W.P.No.6431 of 2016, which was filed challenging the impugned proceedings of the first respondent in TIN : 33531080477/2011-2012 and seeking qu .....

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₹ 56,95,31,912 respectively claiming an exemption of ₹ 12,09,805/- in their monthly return filed in Form I under the Tamil Nadu Value Added Tax Act for the year 2011-12 before the department. Their accounts was assessed under the deemed assessment scheme under Section 22(2) of the Act as on 31.10.2012. In view of stock discrepancies found by the enforcement officials, during their inspection, the first respondent proposed to revise the assessment of the dealer for the year 2011-12. A .....

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ctured goods by adopting the formula based on the money value arrived at the sale value of ₹ 3,96,97,406/- and added equal amount towards probable omissions of ₹ 3,96,97,406/- and thereon, proposed to levy tax at 5% amounting to ₹ 39,69,741/-. The first respondent in order to arrive at the alleged variation discrepancy adopted gross profit at 23.62% as per the appellant's audited Profit and Loss Account of the year 2010-2011. Therefore, the first respondent proceeded to rev .....

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anted by the first respondent in the last week of October, 2015, with the support of relevant documents and objections filed by them, the appellant appeared on the hearing date and requested the first respondent to drop the proposal of passing revised assessment. 5. Without considering the objections of the appellant, the first respondent passed the impugned order on 18.1.2016 by rejecting the application filed by the appellant and confirming his proposal of levy of tax. Aggrieved by the said or .....

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ant/writ petitioner challenging the impugned proceedings submitted that the decision of the High Court is binding on the authority. 6. The contention of the appellant/writ petitioner was disputed by the counsel for the department and contended that the same can be decided only by the appellate authority. Therefore, the Writ Petition filed by the appellant/writ petitioner is not maintainable under Article 226 of the Constitution of India. 7. Considering the rival contentions of the parties, by or .....

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ved from the second and third respondents without applying his mind independently. (iii) Without considering the objections dated 2.9.2016 filed along with documents by the appellant, the Assessing Authority passed the impugned order confirming his proposal, for the reason that correct figures were not produced before the inspecting officials. (iv) Adopting formula methodology in terms of money value is contrary to the decisions of the High Court. 9. In support of the contention of the appellant .....

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Hyderabad and another reported in [2006] 3 VST 68 (AP) (iv) Advantage Computers India Pvt.Ltd., Vs. Commercial Tax Officer, Chennai, in W.P.No.2020 of 2007 dated 20.1.2007, (v) Amutha Metals vs. Commercial Tax Officer, Chennai, reported in [2007] 9 VST 478 (Mad) (vi) Steel Authority of India Ltd., vs. Sales Tax Officer, Rourkela-I Circle and others, reported in [2008] 16 VST 181 (SC), (vii) Sujana Universal Industries Ltd., Vs. Deputy Commercial Tax Officer, Chennai, reported in [2009) 23 VST 1 .....

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ted in [2015] 81 VST 560 (Mad) (xiii) Nokia Inda Pvt.Ltd. vs. Deputy Commissioner (CT)-IV reported in [2015] 79 VST 137(Mad) (xiv) W.A.Nos.1191 and 1192 of 2008 dated 23.10.2008. (xv) W.A.Nos.521 and 522 of 2013, dated 25.3.2013. 10. In the light of the above decisions, the appellant prayed that the Writ Petition is maintainable without exhausting the alternative remedy before the appellate authority. Therefore, the Writ Appeal has to be allowed granting the relief as prayed in the Writ Petition .....

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s well for personal hearing. Further, it is submitted that appellant was not represented on the hearing date before the Assessing Authority. After considering the objections of the appellant/writ petitioner, the Assessing Authority passed the detailed impugned order by rejecting the objection of the appellant. Further, he would submit that Assessing Officer had passed the impugned order only on the basis of the independent decision, not on the basis of any direction or report issued by the enfor .....

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assed under the Act. Therefore, challenging the impugned Assessment Order bypassing the alternative remedy is not at all maintainable under Article 226 of the Constitution of India before this Hon'ble Court. 12. The facts raised by the appellant are disputed facts. Therefore, the following decisions relied on by the learned counsel appellant are not applicable to the facts of the present case. (i) In the case of K.S.Shivaji & Co. Vs. Joint Commercial Tax Officer, Esplanade Division II, M .....

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Assessing Officer followed the directions of his higher authorities (Enforcement Officers) who had quantified the surplus turnover as well as penalty. No independent application of mind by the Assessing Officer. In the present case, the Assessing Officer considered the objections and reasons in the impugned order. The assessee has not Assessing Officer had to rely on the details unearthed by the Inspecting Officials from the P & L Account of the Assessee. Hence, the contention of the writ p .....

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sessing Officer has violated the principles of natural justice and there was no independent application of mind. Insofar as the present case is concerned, there is no allegation for the violation of principles of natural justice. Personal hearing was offered and objections were considered in detail. (v) Amutha Metals vs. Commercial Tax Officer, Chennai, reported in [2007] 9 VST 478 (Mad), State of Tamil Nadu vs. A.N.S.Guptha and sons reported in [2011] 38 VST 45 (Mad), W.A.Nos.1191 and 1992 of 2 .....

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rder. Assessee failed to place details even before the Officer concerned. Therefore, the impugned order passed by the first respondent on the basis of the available materials by applying independent application of mind. Hence, the contention of the petitioner cannot be countenanced. (vi) In the case of Steel Authority of India Ltd., vs. Sales Tax Officer, Rourkela-I Circle and others, reported in [2008] 16 VST 181 (SC), cryptic order was passed by the first appellate authority. No proper reasoni .....

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be agitated before the appellate authority. In aforesaid case, the decision was given under the appellate jurisdiction of the High Court. Therefore, the said ratio cannot be followed at the stage of challenging the assessment order. (viii) In the case of State of Tamil Nadu vs. K.J.Auto Units, Trichy in Tax Case (Revision) No.617 of 2006, the issue decided was regarding adoption of quantitative analysis method to arrive at stock variation. Insofar as the present case is concerned, decision was g .....

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. Appeal remedy was not availed by the assessee. Ratio cannot be followed/applied at writ stage. (x) In the case of Narasus Roller Flour Mills vs. Commercial Tax Office (Enforcement Wing), Sankagiri and another reported in [2015] 81 VST 560 (Mad), principles of natural justice was violated. Personal hearing was denied and records produced by the assessee refused to be admitted by the Assessing Officer. Insofar as the present case is concerned, there is no violation of principles of natural justi .....

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Officer. Insofar as the present case is concerned, there is no allegation of violation of principles of natural justice and there is no issue raised pointing to the jurisdiction of the assessing officer. Whether judicial precedents were followed or not is a question to be decided by the appellate authority. 13. Heard Mr.P.Rajkumar learned counsel appearing for the appellant and Mr.Kanmani Annamalai, learned Additional Government Pleader appearing for the respondents. 14. The point for considerat .....

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ct for the year 2011-12. The first respondent requested to file the details for claiming exemption otherwise, appropriate tax will be levied. Further, at the time of inspection, the enforcement wing officials found stock discrepancy. Along with the pre-revision notice, stock reconciliation statement was also enclosed in view of the proposed revised assessment of the dealer for the year 2011-2012. The objection was received from the appellant through a representation on personal appearance before .....

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, details were not furnished before the inspecting the officials as to the stock variation. 16. The burden of proof is on the petitioner under Section 17 of the TNVAT Act to disprove the findings of the Enforcement Wing Officials regarding stock verification. This burden can only be discharged before the assessing officer or the appellate authority. As the disputed facts are involved in the case for decision, the same can be decided by the appellate authority going into the facts of the case. Th .....

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y the Writ Petition has been filed bypassing the alternative remedy which is provided under the statute. Therefore, the party must exhaust statutory remedy before resorting to the writ jurisdiction. (b) In C.A.Abraham, Uppoottil, Kottayam vs. The Income Tax Officer, Kottayam reported in 1961 AIR 609 : 1961 SCR (2) 765, the Hon'ble Supreme Court has held that the appellant could not be permitted to invoke the jurisdiction of High Court under Article 226 of the Constitution of India when he ha .....

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ther by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of .....

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vide Titaghur Pape Mills Co.Ltd., v. State of Orissa AIR 1983 SC 603, Assistant Collector of Central Excise, Chandan Nagar v. Dunlop India Limited, 1985 (19) E.L.T 22 (SC) = AIR 1985 SC 330 etc.,. 6. It is well settled that when there is an alternative remedy ordinarily writ jurisdiction of this Court under Article 226 of the Constitution should not be invoked. This principle applies with greater force regarding tax proceedings. As observed by the Supreme Court in Titaghur Paper Mills Co.Ltd., v .....

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filing a petition under Article 226/227 of the Constitution on the premise that the insurer has limited grounds available for challenging the award given by the Tribunal. Section 149(2) of the Act limits the insurer to file an appeal on those enumerated grounds and the appeal being a product of the statute it is not open to an insurer to take any plea other than those provided under Section 149(2) of the Act. (f) In the case of Commissioner of Income Tax and others vs. Chhabil Dass Agarwal repor .....

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een taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 16. In the instant case, the Act provides complete machienry for the assessment/reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permi .....

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xercised its jurisdiction in the facts of the instant case. In the light of the same, we are of the considered opinion that the writ Court ought not to have entertained the writ petition filed by the assessee, wherein he has only questioned the correctness or otherwise of the notices issued under Section 148 of the act, the reassessment orders passed and the consequential demand notices issued thereon. (g) In the case of Union of India (UOI) vs. Rubber Products Ltd., reported in MANU/SC/1481/201 .....

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lternative remedy i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, the High Court will not entertain a petition under 226 of the Constitution of India, if an effective alternative remedy is available to the aggrieved pers .....

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