TMI Blog2019 (7) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent has made some approximation and has taken into account whatever material was available before him. Writ petitioner has not produced any contra material thereafter though the respondent had specifically asked for three different sets of documents, which were not produced - this Court is inclined to accept the submission that the instant case is distinguishable on facts from 'Tvl.Nithra Furniture case'. In the instant case, it is nobody's case that while making best judgment assessment, it has been made arbitrarily. Respondent had added 50% of the returns taken out from the web report, but that is based on absence of documents, which were sought for under 12.03.2018 notice. In the absence of documents, the respondent has no option other than making approximation. Petition dismissed. - W.P.No.12370 of 2019 And W.M.P.No.12675 of 2019 - - - Dated:- 5-7-2019 - Mr. Justice M. Sundar For the Petitioner : Mr.V.Sundareswaran For the Respondent : Ms.G.Dhanamadhri Government Advocate (Taxes) ORDER Mr.V.Sundareswaran, learned counsel on record for writ petitioner and Ms.G.Dhanam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent intends to add 50% of this turnover namely little over 53.54 lakhs for non submission of Form 'WW'. Though this notice is not happily worded, it is clear that the respondent has done two things under this notice dated 01.02.2018. One is the respondent has called upon the writ petitioner dealer to file Form 'WW' in the prescribed form in accordance with Section 63A of TNVAT Act and Rule 16 of TNVAT Rules. For the purpose of clarity, this Court deems it appropriate to extract entire Section 63A of TNVAT Act and 16A of TNVAT Rules and the same read as follows: ' 63-A. Accounts to be audited in certain cases .- (1) Every registered dealer whose total turnover including zero-rate sale and sale in the course of inter-State trade or commerce as specified in Section 3 of the Central Sales Tax Act, 1956(Central Act 74 of 1956) in a year, exceeds one crore rupees, shall get his accounts in respect of that year, audited by an Accountant and submit a report of such audit in the prescribed Form, duly signed and verified by the Accountant, to the assessing authority, within such period as may be prescribed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dealer did not evoke any response, the respondent sent one more communication to the writ petitioner dealer being communication dated 12.03.2018 bearing reference TIN:33264481203/2016-17 captioned 'PERSONAL HEARING NOTICE'. 12. In this 12.03.2018 communication, respondent has clearly mentioned that this communication is in continuation of earlier communication dated 01.02.2018 and it had also been made clear that best judgment assessment is intended to be adopted. In other words, it has been made clear vide 01.02.2018 notice (though captioned 'NOTICE FOR NON RECEIPT OF FORM 'WW') that respondent intended to embark upon the exercise of best judgment assessment inter-alia under Section 22(4) of TNVAT Act. Not only has it been made clear that the respondent is going to embark upon the exercise of assessment by adopting best judgment method under Section 22(4) of TNVAT Act, but the proposal to add 50% of turnover, which has been taken out from website has also been communicated to the writ petitioner, but the writ petitioner neither responded nor participated in the personal hearing. 13. This is articulated in the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment method cannot be found fault with. 19. There is no difficulty in accepting the submission that adequate opportunity had been given to the writ petitioner. 20. This Court also notices that Hon'ble Supreme Court in Commissioner of Sales Tax, Madhya Pradesh Vs. H.M.Esufali reported in (1973) 2 SCC 137 [ 'H.M.Esufali principle' for the sake of brevity] equivalent being 33 STC 42 , had held that in best judgment assessment methods, some amount of approximation is inevitable. Hon'ble Supreme Court has also held that as long as the estimate made by the Assessing Officer is not arbitrary, the same cannot be questioned. 21. In the instant case, unlike 'Tvl.Nithra Furniture case', best judgment assessment was not revisited solely because of Form 'WW' issue. This becomes clear from the personal hearing notice issued by the respondent dated 12.03.2018 captioned 'PERSONAL HEARING NOTICE'. A perusal of this notice reveals that the respondent has asked for atleast three documents with clarity and specificity. For the purpose of ease of reference, this Court deems it appropriate to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in paragraph 4 and the relevant portion of paragraph 4 reads as follows: '4.... It is well known that the best judgment assessment has to be on an estimate which the assessing authority has to make not capriciously but on settled and recognised principles of justice. An element of guess work is bound to be present in best judgment assessment but it must have a reasonable nexus, to the available material and the circumstances of each case. (See The State of Kerala Vs. C.Velukutty). Where account books are accepted along with other records there can be no ground for making a best judgment assessment.' Most relevant part of H.M.Esufali principle is contained in paragraph 8 and the most relevant portion of paragraph 8 reads as follows: '8....... In such a situation, it was not possible for the Sales Tax Officer to find out precisely the turnover suppressed. He could only make an estimate of the suppressed turnover on the basis of the material before him. So long as the estimate made by him is not arbitrary and has nexus with facts discovered, the same cannot be questioned. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome to the conclusion that they were rightly rejected, the next question that arises for consideration is whether the basis adopted in estimating the turnover has a reasonable nexus with the estimate made. If the basis adopted is held to be a relevant basis even though the courts may think that it is not the most appropriate basis, the estimate made by the assessing authority cannot be disturbed. In the present case, there is no dispute that the assessee's accounts were rightly discarded. We do not agree with the High Court that it is the duty of the assessing authority to adduce proof in support of its estimate. The basis adopted, by the Sales Tax Officer was a relevant one whether it was the most appropriate or not. Hence the High Court was not justified in interfering with the same. ' 26. In the instant case, it is nobody's case that while making best judgment assessment, it has been made arbitrarily. Respondent had added 50% of the returns taken out from the web report, but that is based on absence of documents, which were sought for under 12.03.2018 notice. In the absence of documents, the respondent has no option other than making approximation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces were duly served on the writ petitioner. There is also no disputation that these two notices did not evoke any response or reply from the writ petitioner as alluded to supra. 31. Therefore, applying the 'H.M.Esufali principle' and 'S.G.Jayaraj Nadar principle' laid down by Hon'ble Supreme Court, this Court is left with the considered view that this is not a fit case calling for interference qua impugned order. Before parting with the case, it is also necessary to notice that there is a statutory appeal available against the impugned order dated 04.06.2018. 32. It is open to the writ petitioner to avail this statutory alternate remedy of filing a statutory appeal under Section 51 of TNVAT Act. 33. With regard to alternate remedy and exercise of writ jurisdiction on the teeth of alternate remedy, from a long line of authorities of Hon'ble Supreme Court, it can be safely deduced that alternate remedy rule qua exercise of discretionary writ jurisdiction on the teeth of alternate remedy is a self imposed restraint which is not a rule of compulsion, but is a rule of discretion. In other words, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasijudicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 55.It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.' 34. Therefore, this being a matter arising under fiscal law pertaining to tax and cess, this Court respectfully follows the ratio of Hon'ble Supreme Court that alternate remedy rule has to be applied with utmost rigour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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