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Shri Coimbatore Jewellers India Private Limited Versus The Assistant Commissioner (CT)

2016 (7) TMI 1193 - MADRAS HIGH COURT

Denial of input tax credit - Validity of assessment order - demand based on defects pointed out by the Enforcement Wing and prepared statement got signed - abdication of the powers of an Assessing Officer and on the principles of violation of natural justice and non application of mind - Held that:- Two things emanate from the observations. Firstly, the Assessing Officer came to the conclusion that there was an admission of the defects, which are seriously disputed by the petitioner. The second .....

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he dealer and if the dealer places objections, then the Assessing Officer is duty bound to decide the matter on merits independently unbiased and uninfluenced by any other factor. - Therefore, the observation made by the respondent in the impugned orders that he is duty bound to implement the audit report is a perverse observation and deserves to be set aside. Secondly, the admission of guilt, if held to be the sole basis for rejecting the dealer's case, the settled legal principle is that t .....

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gnanam, J. For the Petitioner : Mr. N. Sriprakash For the Respondent : Mr. Manohar Sundaram, AGP ORDER Mr.Manohar Sundaram, learned Additional Government Pleader takes notice for the respondent. Heard both. Since common issues are involved in these writ petitions, by consent, the writ petitions are heard together and disposed of by a common order. 2. The petitioner is a registered dealer under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter referred to as the TNVAT Act, 2 .....

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the fact that they relate to the assessment years 2011-12 to 2014-15. 4. The impugned orders are being challenged on the ground of abdication of the powers of an Assessing Officer and on the principles of violation of natural justice and non application of mind. For the purpose of considering the correctness of the grounds raised by the petitioner, it may not be necessary for this Court to go into the merits of the assessment made on the petitioner and it would suffice to take note of the follo .....

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r contended that the input tax credit availed by them was justified and specifically sought for a personal hearing so as to enable them to meet objections and make good their claim. 6. To establish that the explanation was received in the office of the respondent, the petitioner has filed a copy of acknowledgment signed by an officer attached to the respondent - Department, which shows that the letter dated 15.10.2015, along with two enclosures, were received on 23.10.2015. Thus, if the explanat .....

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be passed only on 28.4.2016, in which, it has been stated that the petitioner had not filed any objections to the proposal for revision of assessment. This statement is factually incorrect and the petitioner has been able to establish before this Court that the respondent had received the explanation along with enclosures on 23.10.2015. This is sufficient to hold that the impugned orders dated 28.4.2016 relevant to the assessment years 2012-13 to 2014-15, which were challenged in W.P.Nos.19007 .....

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ondent sought to revise the assessment for years 2011-12 to 2014-15. 9. According to the petitioner, the statement, which was prepared by the Enforcement Wing officials, was pre-prepared. The person, who was in the business premises, was compelled to sign the statement wherein there was a recording as if defect Nos.5 and 6, relating to stock difference and compounding of offence for alleged non maintenance of input tax credit adjustment register, were admitted by the petitioner. 10. It is brough .....

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fice of the respondent on 21.9.2015 as evident from the acknowledgment given. In the said explanation, the petitioner specifically pleaded for an opportunity of personal hearing, so that they will be able to place all points. Admittedly, no opportunity of personal hearing was granted to the petitioner. But, the respondent proceeded to conclude the assessment proceedings and passed the orders dated 9.5.2016. 11. As observed earlier, this Court has not gone into the merits of the case, but is exam .....

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ing for correction in the statement recorded on 17.2.2015. 12. What is more damaging is that the respondent stated that it is the legitimate duty of the Assessing Officer to implement the audit report by way of revision of assessment and that he need not again verify the accounts, as pointed out by the dealer, since the defects were already accepted by the petitioner. 13. Two things emanate from the observations. Firstly, the Assessing Officer came to the conclusion that there was an admission o .....

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e Hon'ble Division Bench, after taking into consideration several other decisions including the decision of the Supreme Court, held as follows : "We are also governed by a decision of the Division Bench of this Court in K.S.Shivji & Co. Vs. Joint Commercial Tax Officer reported in (1965) 16 STC 769 (page 771 in 16 STC) : '.....We need hardly observe that the assessment proceedings are quasi judicial in nature and therefore, the Assessing Authority has an independent duty to care .....

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that basis. In the present case, as rightly pointed out by the Tribunal, the Assessing Officer simply taking into consideration the report of the Enforcement Wing has not applied its mind, but simply has been carried away by the report of the Enforcement Wing and has come to the conclusion. As stated earlier, the Assessing Officer should have decided the matter on the merits independently unbiased and uninfluenced by any other subsequent factors and also should not have stated that it is not a c .....

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t in the impugned orders that he is duty bound to implement the audit report is a perverse observation and deserves to be set aside. Secondly, the admission of guilt, if held to be the sole basis for rejecting the dealer's case, the settled legal principle is that the admission should be candid and unequivocal. In the instant case, the petitioner has not only stated that the pre-prepared statement was compelled to be signed, but also stated that they gave their objections on 5.3.2015 for cor .....

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