TMI Blog2016 (1) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... and again held that the enforcement wing officials have no authority to collect cheques. Their duty under Section 65 of the TNVAT Act is limited to inspection and drawing of a report. As per Section 65 (3), the enforcement wing officials, even when they discover that there is an attempt to evade tax, they can only seize the records for the purpose of enquiry. However, the demand can be made only after assessment and that has to be in accordance with law by the assessing authority. Therefore, It is very clear that the enforcement wing officials cannot usurp the powers of the assessing officers and collect cheques. Therefore, the petitioner is entitled to refund of the cheque amount. - W. P.Nos.3084 to 3092 of 2016 and W.M.P.Nos.2536 to 2544 of 2016 - - - Dated:- 27-1-2016 - MR.JUSTICE R.MAHADEVAN For the Petitioner: Mr.S.Prabhakaran For the Respondent : Mr.Kanmani Annamalai AGP (Taxes) COMMON ORDER This Court repeatedly in numerous cases has set aside the orders of the assessing authority with directions to consider all the materials, to give proper reasons for not accepting the objections, to give proper opportunity including personal hearing, to apply the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon, it is incumbent on the part of the respondent to furnish the relevant copies and also provide an opportunity to crossexamine the dealers at the other end. He further contended that while passing revision orders under Section 27 which contemplates an enquiry and therefore, personal hearing must be given. Despite the fact that the respondent was asked to apply his mind to the explanations and afford a personal hearing was sought for, the respondent has not granted the same. The learned Counsel also contended that being a quasi-judicial officer, the respondent must apply his mind independently to the objections and cannot rely upon the statement made to the officer or the report of the officer. 7. Moreover, the learned Counsel for the petitioner submitted that a cheque for a sum of ₹ 11,98,512/- (Rupees Eleven Lakhs Ninety Eight Thousand Five Hundred and Twelve only) was forcibly collected without any authority and therefore, the same cannot be treated as acceptance of liability. In this regard, he placed reliance upon Circular No 7/2014 issued by the Commissioner of Commercial Taxes Department. He also contended that once the statutory forms are furnished, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ader (Taxes) appearing for the respondent contended that the purchase bills have not been produced as contended by the learned Counsel for the petitioner and they have failed to avail the opportunity provided by the authority through the notice dated 01.10.2015 to submit the documents and hence the petitioner cannot approach this Court and only has to avail statutory remedy. 13. With regard to other issues, the learned Additional Government Pleader also fairly submitted that the respondent is bound to consider all the objections and the documents before passing orders. The learned Additional Government Pleader pointing out to the finding in the impugned proceedings contended that the petitioner having accepted the liability regarding some portion of the orders before the enforcement wing officials and paid money, cannot now raise any objections during the assessment proceedings and therefore, no refund can be made and sought the dismissal of the writ petitions. 14. I have considered the rival submissions and scrutinised the materials on record. W.P.Nos.3084 to 3087 and 3090 to 3092 of 2016: 15. A mere perusal of the impugned proceedings would revealthat the order has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quasi- judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the recorded of reasons by an administrative authority services a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasijudicial functions irrespective of ITA No.200301/Coch/2013 the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubberstamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, adequate and intelligent reasons must be given fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 22, 25, 27 of the Act. 20. The above referred judgments and the circular, clearly laydown that being a quasi-judicial authority, the respondent must pass a reasoned order considering and discussing all the materials placed before him. Only, then when his order can be subjected to judicial scrutiny on merits. As rightly contended by the learned Counsel for the petitioner, when the petitioner has raised objections on each point, the respondent must give specific findings on each point. In the absence of the same, orders can only be termed as non-speaking. The Circular is an outcome of various decisions of this Court. Despite the same, the respondent has passed an order without giving reasons for the objections raised by the petitioner. The same reflects the nonapplication of mind and the lacklustre attitude of the respondent. In the absence of specific findings to the various objections of the petitioner, the impugned proceedings have no legs to survive. 21. With regard to personal hearing, the Hon ble Division Bench of this Court in the Judgment reported in 33 VST 333 has held as follows: 22. This Court, therefore, holds that the provision of Section 16(1-A) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be quashed and consequently, the orders of the Special Tribunal confirming the orders of assessment are also liable to be quashed. 24. The power to levy and demand tax is conferred by the statute and not by consent of the assesse. Any tax levied or demanded must be with the authority of law, otherwise, such a levy would be against the constitutional mandate in Article 265 of the Constitution. In the present cases, the petitioner has submitted their objections claiming that there is no stock difference and that the cheque was collected by force. Therefore, the assessing officer is duty bound to look into the books of accounts, documents and verify the claim of the assesse before passing orders. 25. This Court has time and again held that the enforcement wing officials have no authority to collect cheques. Their duty under Section 65 of the TNVAT Act is limited to inspection and drawing of a report. As per Section 65 (3), the enforcement wing officials, even when they discover that there is an attempt to evade tax, they can only seize the records for the purpose of enquiry. However, the demand can be made only after assessment and that has to be in accordance with la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. Therefore, It is very clear that the enforcement wing officials cannot usurp the powers of the assessing officers and collect cheques. Therefore, the petitioner is entitled to refund of the cheque amount. 29. Relating to the reversal of ITC regarding dealers who have claimed to have done transactions deviating from the usual line, this Court is in consonance with the submissions of the learned Counsel for the petitioner to a limited extent that there is no impediment under the TNVAT Act for a dealer to do any business or for that matter venture into new business. But the same has to reported in the return and proved to the authorities with appropriate documents to show that transaction had infact materialized with their vendor or the purchaser as the case may be. It is for the authorities to consider the claim based on the documents and ascertain the factual aspect. 30. Insofar as the submission of documents is concerned, the petitioner has submitted a common reply for all the assessment years. In the said reply, the petitioner claims to have submitted C Forms, Purchase Bills and books of accounts. In reply the respondent has claimed that purchase bills have not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d enforce payment of tax, including any interest or penalty payable by a dealer under this Act as if the tax or interest or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under the General Sales Tax law of the State; and for this purpose they may exercise all or any of the powers they have under the General Sales Tax law of the State and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest compensation, of offences and treatment of documents furnished by a dealer is confidential shall apply accordingly; Provided that if any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the question of any noncompliance with the relevant statutes does not arise. It was noted by this Court in Sahney Steel and Press Works Ltd. and Anr. v. Commercial Tax Officer and Ors., [1985] 4 SCC 173 that even in a given case, an assessee can be given an opportunity to collect Declaration Forms and furnish them to the assessing authority if the challenge of the assessee to taxability of a particular transaction is turned down. 41. Respondent No.1-company's stand was that it was granted exemption from payment of sales tax and, therefore, there was no requirement of furnishing any C Form for certain periods relating to which there was a doubt about availability of the concession, the declaration Forms were filed. Therefore, the assessing officer shall grant opportunity to the respondent No.1-company to cure the defects, if any in the Declaration Forms. 35. The Honourable Full Bench of this Court in the judgment reported in 51 STC 381 has held as under: 16. We would proceed now to advert to the different ways in which the discretion to allow further time for filing C forms is conferred by the proviso to Section 8(4) of the Act, on the one hand, and the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a rule cannot prevail against the statute, by being repugnant to the statute. A study of the structure of the proviso to Section 8(4) shows how Parliament's peculiar preferences had worked in this regard. While Parliament was content to leave to the rule-making authority, namely, the Central Government, the task of prescribing a rule laying down the time-limit for furnishing C forms, the power to allow further time, however, was not relegated to the Rules, but deliberately enacted into the very text of the provisos to Section 8(4). In this statutory format, with Parliament clearly expressing its mind on the subject, the Central Government must be held to possess no authority whatever to make any rule as respects the power to allow further time, let alone prescribe the conditions subject to which any such power could be exercised. In this sense, the proviso to rule 12(7) must be held to be ultra vires the rule-making power, to the extent that it is inconsistent with, or lays down tests or standards different from, the proviso to Section 8(4). It is quite clear that the proviso to rule 12(7) is both superfluous and badly drafted. The indifferent drafting is all the more reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise the power after the completion of the assessment. 36. From the above judgments, it is clear that the assessing authority has powers not only to extend the time to submit C Forms but also has powers to re-open the assessment on receipt of the C Forms. Therefore, this Court is of the view that the impugned proceedings cannot be sustained and are hereby set aside. It is evident from the impugned proceedings that the differential rate of tax has been collected from the petitioner. The respondent shall consider the C Forms submitted and pass revised orders and refund the amounts collected thereafter. 37. Insofar as W.P.No.3088 of 2016 is concerned, the Input Tax Credit, has been reversed as the statutory forms has not been submitted. The petitioner has not submitted any objections to the proposal. Obviously, he did not have any reply or the C Forms at that point of time. However, inview of the fact that this Court has already set aside the impugned proceedings dated 14.05.2015 and directed the respondent to consider the C Forms and pass revised orders. Once an order under the CST Act is passed , the respondent is duty bound to revise the consequential order under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act or when the assessment is taken up for revision or when a personal hearing is specifically sought for, the respondent must grant the same. While affording personal hearing, the respondent must fix a specific date and time only after receipt of the objections. 42. For the foregoing reasons, the impugned orders in all the writ petitions are set aside. The matters are remanded back to the respondent for fresh consideration. The petitioner is permitted to produce all the documents including the purchase bills, books of accounts and particulars of the vehicles relied upon by them with additional objections, if any within three weeks from the date of receipt of the copy of the order. Upon receipt of the same, the respondent shall fix a date for personal hearing on which date the petitioner shall appear and thereafter, the respondent shall consider the objections and all the documents including the forms submitted by the petitioner and pass orders within four weeks without being influenced by the report of the enforcement wing officials. While passing orders, the respondent shall also consider the claim of refund of the petitioner. 43. In fine, all the writ petitions are allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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