TMI Blog2016 (12) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner, confirmed the proposal in the pre-revision notice. Thus, the impugned orders are flawed for reasons that the merit of the assessments were not gone into by the Assessing Officer. So far as the constitution of the petitioner-M/s Steel Exchange House is concerned, various factual issues have been raised by the petitioner in the affidavits filed in support of the Writ Petitions which cannot be adjudicated in a Writ proceedings - the issue relating to the constitution of the erstwhile proprietary concern also requires to be considered afresh. Petition allowed by way of remand. - W.P.Nos.26730 to 26734, 26916 to 26925 of 2016, W.P.No.26730 of 2016 - - - Dated:- 8-11-2016 - T. S. Sivagnanam, J. For the Petitioners : Mr. C.Natarajan asstd by Mr.P.Rajkumar For the Respondents : Mr. S. Kanmani Annamalai Mr.K.Venkatesh ORDER Heard Mr.C.Natarajan, learned Senior Counsel, assisted by Mr.P.Rajkumar, learned counsel for the petitioners and Mr.S.Kanmani Annamalai, learned Additional Government Pleader, assisted by Mr.K.Venkatesh, learned Government Advocate, appearing on behalf of the respondents. With the consent of the learned counsel appearing on eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 2001-2002, wherein they requested for furnishing copies of statement of records as well as to cross examine the other end dealers, who are said to have given statements against them. In the meantime, the petitioner also obtained a declaration from the Steel Authority of India Limited (SAIL), one of the dealers from whom the petitioner had purchased Iron and Steel, who by their declaration dated 29.07.2004, certified that during financial year 2000-2001, they have sold Iron Steel to the petitioner and have duly included the said turnover in their returns before their Assessing Officer and accordingly considered for Assessment. For the financial years 1999-2000 to 2001-2002, on receipt of those particulars, the Officer, who was then functioning as Commercial Tax Officer, Harbour-III Assessment Circle, Chennai, submitted a Deviation proposal dated 18.10.2004, to the Assistant Commissioner (CT), Zone-I, Chennai-6, stating that the purchase details obtained from the petitioner show that majority of the purchases effected by the petitioner was from M/s Steel Authority of India Ltd., Chennai, a Public Sector Undertaking. Therefore, the first respondent recommended that the purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .07.2009. 9. M/s SAIL addressed a letter to the petitioner on 08.07.2009, confirming that they have paid taxes for the relevant assessment years on the transactions effected with the petitioner. One more objection was submitted by the petitioner on 02.08.2009, for the assessment year 2002-2003, i.e. after the disposal of the Writ Petition. While so, the first respondent sent a communication dated 10.07.2009, to the Joint Commissioner (CT), Chennai North Division, stating that substantial transactions have been done by the petitioner with SAIL and therefore, the deviation proposal may be accepted, by bringing to its notice that in respect of the petitioner's sister concern M/s Steel Exchange House, the transactions effected from SAIL were accepted. That was followed by another communication by the Deputy Commissioner (CT), Zone-I, dated 20.08.2009, to the 6th respondent/ Joint Commissioner (CT), Chennai (North) Division, with a request to re-open the petitioner's case and to examine the possibility of considering the second sale exemption, which was already allowed in so far as it relates to the purchase from SAIL, whose existence or bona fides of the transaction cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods consisting of 223 pages and Declarations from the local suppliers consisting of 170 pages. Annexure-II, M/s Sri Raja Transport, who were engaged for transporting goods from SAIL stockyard to the petitioner's godown and similar documents were produced for the assessment year 2003-2004. Thus, it is submitted that the materials placed by the petitioner before the first respondent were not considered and the first respondent solely proceeded to confirm the D-3 proposal, which he was directed to do. It is further submitted that the burden cast upon the petitioner under section 10 of the TNGST Act has been discharged and the burden has been re-shifted upon the first respondent to establish in the manner known to law that the petitioner is not entitled for second sale exemption and that having not been done, the impugned orders are liable to be set aside. 13. In support of his contentions, the learned Senior Counsel placed reliance on the following decisions: (1) Orient Paper Mills Ltd., V. Union of India (1969) 1 SCR 245]: [AIR 1969 SC 48] (2) Orient Paper Mills Ltd., V. Union of India [(1970) 3 SCC 76] (3) Indure Limited V. Commissioner of Sales Tax, Cuttack, O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness of the transactions. It is further submitted that on verification of the Books of Accounts, the quantum correlation alone could be verified and unless and until the purchases are supported by physical movement, the petitioner is not entitled for exemption. Further, it is submitted that it may not be relevant as to from which dealer the petitioner have purchased the goods and merely because the petitioner had transaction with SAIL, that by itself will not automatically entitle the petitioner for second sale exemption, as the petitioner is bound to prove the movement of goods. 16. Heard the learned counsel for the parties and perused the materials placed on record. 17. Before the Court proceeds to consider the factual matrix, it would be necessary to state as to what are duties and responsibilities enjoined upon the Assessing Officer. There can be no quarrel to the proposition that the Assessing Officer is an independent statutory authority, exercising statutory powers and cannot be bound over by the directions issued by his superior authorities. In Orient Paper Mills Ltd., V. Union of India [(1969) 1 SCR 245] (supra), the Hon'ble Supreme Court after referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as exercising judicial functions conferred on him under the provisions of TNGST Act and any order of assessment is subject to appeal and further appeal and also revision. In the light of the hierarchy of remedies available the appellant/assessing officer cannot be proceeded against by way of disciplinary action. 21. The above decisions give a fair indication as to how the assessing officer should function and what are his powers and it is worthwhile to reiterate that the assessing officer exercises quasi judicial function and he has a duty to act judicially and in an independent manner and he cannot be controlled by the directions issued by his superior authorities and if done so, the decision is ultra vires and void. 22. Having noted the powers of the Assessing Authority, it would be necessary to consider as to what is the duty cast upon the Assessing Officer. In the case of A.N.S.Guptha and Sons, the Hon'ble Division Bench of this Court took note of sections 54, 54A and 55 of the TNGST Act and pointed out that those provisions would clearly indicate that the authority is vested with all powers including invoking the provisions of CPC in summoning the witnesses; compelli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir superior authorities that the D3 proposal requires to be deviated. 26. On a perusal of such deviation proposal dated 18.10.2004, 28.03.2005 and 30.12.2009, and the proposal which emanated from the third respondent dated 20.08.2009, shows that the officers of the Commercial Tax Department have applied their mind to the issue involved in the petitioner's case, but, what is disheartening to note is that the superior authority namely the second respondent, in a mechanical manner, rejected it by a non-speaking order, coupled with a positive direction to the Assessing Officer to implement the D3 proposal. Therefore, this Court is of the view that the Assessing Officer cannot be solely blamed, because considering the hierarchy in the Commercial Tax Department. It is seldom seen that the Assessing Officer refuses to implement the D3 proposal as they may earn the wrath of their superiors. Interestingly, in the instant case, while giving their views on the D3 proposal, the Officers have recorded their prima facie view as to why they seek for a permission to deviate. This could have been considered by the second respondent or the Joint Commissioner/6th respondent in a proper perspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -88. From the Flow Chart, which has been produced, it is seen that from 1987-88, the petitioner's Billing have been accepted and the second sale exemptions have been allowed and the gap is between 1999-2000 and 2003-2004, which are the subject matter of these Writ Petitions. After 2004-2005 onwards, the turnovers have been accepted and second sale exemption has been granted upto 2013-2014, that too by the very same Assessing Officer, who passed the impugned orders. 31. Therefore, if during the relevant period, which is the subject mater in these Writ Petitions, there were some errors committed by the petitioner, then the same has to be thoroughly verified, bearing in mind the duties of the Assessing Officer, as spelt out in the aforementioned decisions. All the above reasons are sufficient to hold that the impugned assessments are illegal and erroneous. 32. In so far as W.P.Nos. 26916 to 26925 of 2016, the petitioner in these case are M/s Steel Exchange House, (now defunct), represented by Mr. Nirmal Kumar, son and legal heir of late Moolchand Maheswari. The difference in these cases when compared to the case relating to M/s Kapil Agencies, are only two fold. Firstly, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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