TMI Blog2019 (6) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... a group of Dealers. Therefore, such orders under Section 64(4) cannot be passed for a group of registered dealer in one go. The recording the opinion about the default of the assessee cannot be construed to be an administrative function or administrative order passed by the Commissioner. Therefore, such an order under Section 64(4) of the Act can be nothing but a quasi-judicial order, entailing civil consequences for the Assessee or Dealer concerned. In view of this, the orders to be passed under Section 64(4) of the Act have to meet the principles of natural justice viz., the compliance of the principles of audit alteram partem, giving of a notice and opportunity of hearing to the assessee concerned. The Assessee before the Commissioner can always contend that no such default as stipulated in Section 64(4) clauses (a) to (e) is made out against him and if he places such a case before the learned Commissioner, it is incumbent upon of the Commissioner to apply mind and pass appropriate speaking and reasoned order in this regard. Therefore, passing of an omnibus or general order to audit of business of dealers like done in the present case, does not fit in the scheme of Section 64(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge dated 26.07.2017, allowing the writ petition filed by the respondent assessee, M/s.Original Vel Sporting News vs. Joint Commissioner (CT), Enforcement-1, Chennai and others. 2. The learned Single Judge held that the order of the learned Commissioner of Commercial Taxes, directing audit of the business of assessee dealer for period in question was not sustainable, as it did not satisfy the conditions and criteria laid down in Section 64(4) of the Tamilnadu Value Added Tax Act, 2006 (hereinafter referred to as Act). The learned Single Judge held that no individual order was given by the Commissioner to direct such audit of the business of the respondent dealers and that the Joint Commissioner, a lower Authority, was not empowered to order any such audit of the particular business dealer, as there was no authorisation or delegation by the Commissioner possible in terms of Section 64(4) of the Act. The order of the learned Commissioner was therefore quashed. Being aggrieved by the same, the Revenue has filed the present Writ Appeal before this Court. 4. Learned counsel for the Revenue Mr.Mohammed Shafiq, with due emphasis, sought to submit that there was a due and proper autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing indicates the manner, which will be discussed slightly hereafter. A list of 94 dealers is produced with said order and at Serial 85 of that list gives the name of the Assessee M/s.Original Vel Sporting News. Learned counsel for the Revenue therefore submitted that in terms of Section 64(4) of the Act, this is an appropriate order passed by the learned Commissioner directing such audit of the respondent dealer and others and the learned Single Judge has erred in allowing the writ petition. 5. Per contra, the learned counsel for the Assessee, Mr.Krishna Srinivasan, vehemently submitted before us that the order dated 16.05.2014 purportedly passed by the Commissioner was not even produced before the learned Single Judge and therefore, the premise of the order passed by the learned Single Judge that there was no order or authorisation for such audit on the part of the Commissioner was perfectly justified and any such audit order now produced was also liable to be quashed including the consequential proceedings. He has further submitted that the learned Commissioner cannot delegate the power to order an audit of the business of the registered dealers to any lower authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealers before this Court has no iota of sanctity and without the individual cases of dealers being discussed by the Commissioner, about the condition of Section 64(4) of the Act. He, therefore submitted that there is no merit in the writ appeal filed by the Revenue and the learned Single Judge was justified in allowing the writ petition filed by the assessee. 6. We have heard the learned counsels. 7. Firstly, we express our serious reservation on the manner in which the Revenue appellant has sought to produce the copy of the order dated 16.05.2014, only now and which was allegedly passed by the learned Commissioner of the Commercial Taxes Mr.K.Rajaraman, when the matter was taken up by the Court today in pre-lunch session only, Page No.1 of that order contained only paragraphs 1 to 3 and Second page of the said order bearing the signature of the Commissioner, Mr.K.Rajaraman and his endorsement was not even available. The annexure thereto comprising list of 94 dealers is not signed by anybody. When the Court expressed its anguish on the manner in which an incomplete document was produced before this court, with due apology, the learned counsel sought a pass over of the case an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale or delivery note or such other documents, as may be prescribed. (4) 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. For the purpose of this section, the selection of dealers for audit shall be made from amongst the dealers,- (a) who have not filed returns within the prescribed period; or (b) 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. 9. The provisions of sub-Section (4) of Section 64 empowers the Head of the Department viz., the Commissioner to order for an audit of the business of any registered dealer by an officer not below the rank of the Deputy Commercial Taxes Officer, who is much lower authority in the hierarchy. The criteria of selection of dealers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act is not expected to issue a general guideline or a Circular for guiding all the lower authorities. Section 64(4) of the Act envisages an individual order for audit of the books and accounts and other revenue records of the assessee for a particular period and it has to be individual order showing the application of mind to the facts and circumstances of each case for each period. The power to delegate further is not provided under Section 64(4) of the Act. Therefore, the manner in which the impugned order dated 16.05.2014, has been passed by the learned Commissioner laying down certain limits or criterias quoted above leaving it free for the Joint Commissioner to authorise officers below to undertake such audit is wholly untenable and unsustainable order. 11. The audit of the books and accounts of an assessee is required not only under the provisions of Section 64 (4) of the Act but such provisions, which may be applicable to the assessee concerned, may be under the other relevant statutes also like the provisions of the Companies Act, if an assessee is a limited Company, under the provisions of the Income Tax Act, vide Section 142(2A) thereof as well. The Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dealers. Therefore, it is clear that such list is not prepared by the learned Commissioner with due application of mind by him to the individual cases of the registered Dealers, as to which criteria of default, they do not satisfy and therefore, an audit has to be undertaken by the Departmental Authority. Though the cost of such audit is not directed to be borne by the registered dealers, sub-section (5) mandates that the dealer is to afford or facilitate the production of books of accounts and documents during the course of such audit including verification of documents. Such an order without complying with the principles of natural justice and without providing an opportunity of hearing to the dealer, deserves to be quashed only on the ground of non-compliance with the principles of natural justice. The Hon'ble Supreme Court in a large number of cases has even held that unless the provisions of the natural justice are specifically excluded by the statutory provisions, they can be read into such provisions in the interest of justice. The provisions in Section 64(4) of the Act do not specify anything about the notice for hearing to the registered dealers but the mere absence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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