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TMI Blog2018 (6) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, pursuant to which a notice, dated 18.08.2015, was issued by the second respondent, Joint Commissioner (CT), Enforcement-I, directing the petitioner to produce the books of accounts, stock statements, records, registers, etc., for the period from 2007-08 and any other record specified during the audit. The petitioner was directed to afford necessary facility to inspect such books of accounts or other documents, as required and which may be available at such places and afford necessary facility to check or verify the stock, which has been found and furnish such information as required as to any matter, which may be useful for or relevant to any proceedings under the TNVAT Act. 3. Mr.C.Backthasiromani, learned counsel for the petitioner contended that Section 64(4) of the TNVAT Act specifically empowers the first respondent alone to order and authorise the lower level officials like Commercial Tax Officer, Enforcement wing to conduct VAT Audit of the business place of any registered dealer and the VAT Audit conducted in the petitioner's business premises was as per the authorisation issued by the Joint Commissioner (CT), the second respondent, is illegal and without jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished on the notice board of the assessment circle and also in the website of the department. The Assessing Authority shall call for the accounts for those assessees for details scrutiny and pass appropriate orders. The learned counsel with a view to draw a distinction between the power conferred on the Commissioner under Section 64(4) of the Act and the power under Section 65 referred to the statutory provisions and submitted that the power under Section 64(4) shall be exercisable only by the Commissioner and not by any other authority, whereas the power under Section 65 to order production of accounts and powers of entry, inspection etc., can be exercised by any officer prescribed by the Government in this behalf. Therefore, when the power under Section 64(4) of the Act is specifically conferred on the Commissioner, he alone can exercise such power. It is further submitted that Section 48 of the Act, deals with 'Appointment of Commissioner of Commercial Taxes, additional Commissioners of Commercial Taxes, Appellate Joint Commissioners of Commercial Taxes, Joint Commissioners of Commercial Taxes, Appellate Deputy Commissioners of Commercial Taxes, Deputy Commissioners of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcement wing. The daily attendance, leave permissions to the officers, monitoring and supervision of the work of the field officers on daily basis and disciplinary action against the erring officers are all carried out by the respective Joint Commissioners alone. The performance of the Joint Commissioners is monitored and reviewed by the Commissioner. The availability of the officials on duty and their allotment to conduct audit, their efficiency level in carrying out the work of the audit, the monitoring of daily process of audit, and final draft of audit report approval can be monitored by the respecive Joint Commissioners (Enforcement) alone. 6. Distinguishing the decision in Jeevan Buy N.Save (supra), it is submitted that in the said case, the annexure was not appended to the proceedings and was not placed before the Court and hence, the names of the entities identified for conduct of VAT Audit was not known. However, in the instant case, the proceedings of the Commissioner contains an annexure in which the name of the petitioner finds place in serial No.168. Thus, it is submitted that the audit in respect of the petitioner has been conducted in accordance with Section 64(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary in the opinion of the Commissioner. 11. In terms of the above, the Commissioner may order for audit of the business of any registered dealer by an officer not below the rank of Deputy Commercial Tax Officer. The said provision gives the guidelines for selection of the dealers, who have to be subjected to audit, as contained in clause (a) to (e) of Section 64(4). 12. The petitioner's case is that the statute prescribes the manner in which, the VAT Audit has to be authorised, by the Commissioner alone, which power, conferred by the Government on the Commissioner cannot be sub-delegated to any other authority, as the Commissioner himself is a delegate of the Government. Further, argument being, a delegate cannot sub-delegate in the absence of any such specific statutory power. 13. In Jeevan Buy N.Save (supra), the petitioner dealer contended that VAT Audit was conducted based on authorisation of the Joint Commissioner by placing reliance on the statement recorded from the said dealer, which mentioned that the VAT Audit is pursuant to authorisation by the Joint Commissioner. Similar arguments as advanced in the instant case were put forth in the said case and the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner, dated 16.05.2014, which states that under the powers vested on the Commissioner under Section 64(4) of the TNVAT Act, the registered dealers noted in the annexure are selected on the basis of the following risk parameters for conducting VAT Audit by Enforcement wing officials. The risk parameters being as follows:- Sl.No. Parameters (i) Dealers whose total turnover (VAT+CST) is more than Rs. 50 crores in 2013-14 and who have not been subjected to audit so far since 01/01/2007. (ii) Dealers (Traders only) whose total output tax < 90% of total input tax in 2013-14. (iii) Dealers whose value of inter-state branch/consignment transfer has increased more than 20% in 2013-14 over previous year. (iv) Dealers who made import/interstate purchase/transfer of taxable goods in 2013-14 and whose output tax < 90% of VAT payable on value of such inward goods. (v) Dealers who effected total purchase of goods from R.C. cancelled dears andclaimed ITC of more than Rs. 10,000/- in 2013-14. (vi) Dealers who had paid average net VAT of Rs. 50,000/- and above every month in 2013-14 and such payment of tax remained within the range of + or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner and not by the Joint Commissioner. The directions issued to the Joint Commissioner of Enforcement Wing is to depute the field level officers and senior officers, who will conduct the audit. 19. I agree with the submissions made by Ms.G.Dhana Madhurai, that it is impossible for the Commissioner to name Deputy Commercial Tax Officers or Commercial Tax Officers, who will conduct the VAT Audit in respect of a particular dealer. The Commissioner being the Head of Department is required to discharge several duties, which are onerous. Therefore, the manner in which the office and the staff have to be utilised and administrated is well open to be regulated by the Head of Department. It is not for the dealer to dictate terms as to how the Commercial Tax Department should organise its business. The directives issued to the Joint Commissioner to take forward the direction to conduct audit is an administrative decision by the Commissioner and being the Head of Department, it is well within his jurisdiction to issue such direction for effective and efficient administration of his department. Thus, the petitioner by placing reliance on the expression "authorised" used in the statement ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese matters have to be assigned to the official hierarchy and to be carried out as per the Rules of business followed by the department. Thus, the statute states that the Commissioner is the authority, who may order for an audit and once the order is passed by the Commissioner, it is for the officials of the department to carry out the order. 21. In my considered view, this is precisely what has been done in the instant case. As pointed out earlier mere usage of the expression authorised by the Joint Commissioner in his proceedings, does not mean that the Joint Commissioner has commenced the audit on his own accord. It has to be borne in mind that the statute uses the expression "order", and does not use the expression "authorise". Thus, what is required under Section 64(4) is an order of the Commissioner and if there is an order to the said effect, then authorisation of lower level officers, by officers subordinate to the Commissioner, cannot be termed as ordering an audit, but it is a proceedings by which the order passed by the Commissioner, is implemented or carried forward. 22. As mentioned above, the decision in the case of Jeevan Buy N.Save (supra), is clearly distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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