TMI Blog2018 (9) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the petitioner to raise such contention before the assessing officer, as and when show cause notice is issued - Petition is dismissed. - W.P.No.14984 of 2017 And W.M.P.No.16231 of 2017 - - - Dated:- 12-6-2018 - Mr. T. S. Sivagnanam J. For the Petitioner : Mr. M. Md. Ibrahim Ali For the Respondents : Mrs. G. Dhanamadhri, Government Advocate (Taxes) ORDER Heard Mr.Md.Ibrahim Ali, learned counsel for the petitioner and Mrs.G.Dhanamadhri, learned Government Advocate (Taxes) for the respondents. 2. The petitioner has filed this writ petition challenging the VAT Audit directed to be conducted by the second respondent as being wholly without jurisdiction, since the authorization can be granted only by the Commissioner. 3. When the case came up for hearing on 06.06.2018, this Court pointed out that identical issue was considered by this Court in M/s.Empress Audio vs. Commissioner of Commercial Taxes and Others in W.P.No.6031 of 2018 dated 28.04.2018 and identical contention was rejected. Learned counsel for the petitioner sought time to go through the order and make submissions. 4. Today, when the case is taken up for hearing, the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who have claimed exorbitant amount of refund of tax; or (c) who have filed returns, but in the opinion of the Commissioner he is not satisfied with the correctness of any return filed, any claim made, deduction claimed or turnover disclosed in any such return; or (d) on the basis of any other criteria or on a random selection basis by the Commissioner ; or (e) where detailed scrutiny of the case is 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 subdelegate in the absence of any such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact a delegation of his power to the Joint Commissioner. The Court use the expression appears . Therefore, on facts, the Court came to the conclusion that it appears that there has been delegation of power by the Commissioner to the Joint Commissioner, which in terms of Section 64(4), was impermissible and therefore held the VAT Audit to be without jurisdiction. 16. In the case on hand, the Ms.G.Dhana Madhuri has produced the proceedings of the 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 ₹ 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court by referring to the word authorised used while recording sworn statement from the proprietrix of the petitioner on 23.09.2015. This presumably has been used on account of paragraph 3 of the order passed by the Commissioner, dated 16.05.2014, where he has directed the Joint Commissioners of Enforcement Wing to authorise officers for such audit not below the rank of Commercial Tax officer. Unfortunately, the petitioner has confused the usage of the expression 'authorised' in the statement to mean, as if, it is the Joint Commissioner who has authorised the audit. On facts, the respondents have been able to establish before this Court that authorisation has been done by the Commissioner 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. While exercising the power under Section 64(4) what the Commissioner of Commercial Taxes is expected to do, is to order for an audit of the business of any registered dealer. The statute prescribes the rank of the officer, who can be authorised to conduct an audit. Therefore, the requirement under the provision is for ordering for audit of the business of a dealer and upon such order being passed, the officials in the hierarchy are to carry out the directions of the Commissioner. Thus, when the Commissioner orders for an audit, which would be state wide obviously, as the Head of the department, he cannot be expected to name the officer, who will go to the business premises of the dealer for the purpose of audit. These 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout jurisdiction. Accordingly, direction was issued to return those cheques. Though such a direction has not been sought for in the main writ petition, the petitioner has sought for an interim relief. Since the collection of cheques by the Enforcement Wing Officers from the dealer during the course of inspection is without jurisdiction, the four cheques, totaling a sum of ₹ 10,00,000/-, has to be returned to the petitioner. 7. The learned counsel for the petitioner further pointed out that with regard to the differences when compared with the P L account and with that of the returns, the petitioner's case is that for obtaining bank loan, the petitioner has given boosted figures and there is no willfulness to evade taxes and there is no element of sale of property of goods transfer, which falls under Section 2(33) of the Tamil Nadu Value Added Tax Act, 2006. In support of such contention, the learned counsel placed reliance on the decision of the Hon'ble Supreme Court in 90 STC 7. 8. In my considered view, this submission cannot be considered at this stage in this writ petition, wherein the challenge is to the VAT Audit report and it is well open to the pet ..... 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