Madras High Court
M/S.Manickavel Edible Oils Private Ltd vs The Commercial Tax Officer on 19 September, 2014
Author: T.S.Sivagnanam
Bench: T.S.Sivagnanam
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 19.09.2014 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.(MD) No.5355 of 2014 W.P.(MD) Nos.5356, 5357, 5358, 5359, 5360, 4685 & 4686 of 2014 and M.P.(MD) Nos.1, 1, 1, 1, 1, 1, 1 & 1 of 2014 and W.P.(MD) Nos.13343, 13344, 13345, 13346, 13347, 13348, 13349, 14400, 14401, 14398 & 14399 of 2013 and M.P.(MD) Nos.1, 1, 1, 1, 1, 1, 1, 1, 1, 1 & 1 of 2013 W.P.(MD) No.5355 of 2014 M/s.Manickavel Edible Oils Private Ltd., rep.by it's Director Mr.M.Nagalingam Manthirisabai 123-A, Katchery Road, Virudhunagar ... Petitioner -vs- The Commercial Tax Officer-1 Virudhunagar Assessment Circle Virudhunagar ... Respondent PRAYER (W.P.(MD) No.5355 of 2014) Writ Petition is filed under Article 226 of the Constitution of India to issue a writ of certiorari calling for the records of the respondent in his proceedings in CST No.504119/2013-2014 and quash the notice dated 04.03.2014 issued therein. !For Petitioners : Mr.R.L.Ramani, Senior Counsel (in all W.Ps) for Mr.S.Raja Jeya Chandra Paul For Respondent : Mr.R.Karthikeyan, A.G.P. (in all W.Ps) :COMMON ORDER
Reserved on : 03.09.2014 Pronounced on : 19.09.2014
In all these writ petitions the challenge is to pre-assessment notices/notices issued by the respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter, referred to as 'the TNVAT Act' and the Central Sales Tax Act, 1956 (hereinafter, referred to as 'the CST Act'). The petitioners are registered dealers under the provisions of the said Acts and though there are more than one dealer in these batch of cases, the legal issue involved in all these writ petitions being identical, they have been clubbed, heard together and disposed of by this common order.
2. The petitioners are manufacturers of edible oil and in the course of business, imports crude palm oil and after being processed the refined palm oil is sold locally, inter-state, export and also by means of consignment/branch transfer to other States. The petitioners also effected sales of the crude palm oil while in the course of import i.e., high sea sales. It is submitted that the export sale and sale in the course of import is exempted under Section 5(1) & 5(2) of the CST Act and under Section 18(1) of the TNVAT Act, which treats it as zero rated sale. Since facts are almost identical, it would suffice to refer to the facts in W.P.(MD) No.5355 of 2014 and the writ petitions filed by the said petitioners.
3. The petitioner filed monthly returns under CST Act for the assessment years 2011-2012, 2012-2013 and 2013-2014 reporting their total and taxable turnover and claimed concessional rate of tax on interstate sales against filing of C-Form declaration. The petitioner also claimed exemption under Section 5(1) and (2) of the CST Act as well as under Section 6(A) of the CST Act in respect of export sales/sales in the course of import and on their branch transfer/consignment sales respectively. By relying upon the amendment to Section 22(2) of TNVAT Act, with effect from 19.06.2012, it is submitted that every dealer is deemed to have been assessed as per the returns on the 31st day of October of the succeeding year. Therefore, it is contended that for the assessment years 2011-2012 and 2012-2013 the petitioner's original assessment has been deemed to have been completed on 31.10.2012 and 31.10.2013 respectively accepting the returns filed and taxes paid.
4. Further it is submitted that a notice, dated 26.07.2013, was issued by the respondent terming it as 'pre-assessment notice' for the assessment year 2012-2013 under CST Act proposing to make an original assessment. The petitioner challenged the said notice by filing a writ petition in W.P.(MD) No.13348 of 2013 stating that the said notice is violation of mandatory provisions of the amended Section 22(2) of the TNVAT Act. In the meantime, the respondent sent a notice, dated 06.11.2013 to the petitioner, proposing to reject the claim of exemption under Section 6A of the CST Act in the absence of supporting documents. On receipt of the said notice, the petitioner sent a reply stating that the pre-assessment notice, dated 26.07.2013, has been challenged in a writ petition and therefore the notice under Section 6A of CST Act cannot be issued. It is submitted that though the petitioner took such a stand, they filed all documents in respect of their claim. Thereafter, another notice, dated 27.11.2013 was issued under CST Act for the assessment year 2012-2013 proposing to treat the high sea sales effected by the petitioner during May 2012 as a local sale under TNVAT Act. The said notice was challenged by the petitioner in W.P.(MD) No.19732 of 2013. The said writ petition was disposed of by order, dated 06.02.2014 by recording the submissions made by the respondent in their counter affidavit with a further direction to the authority to pass necessary final orders as per the statements made in the counter affidavit.
5. Further, it is submitted that subsequently the respondent issued notice, dated 27.02.2014, calling upon the petitioner to furnish details of import made during the assessment years 2011-2012, 2012-2013 and 2013-2014 in the form of a computer generated statement taken from www.icegate.com. Once again, the petitioner challenged the said notice in W.P.(MD) No.4685 of 2014, which was admitted and an order of interim stay was granted. Thereafter, two notices, dated 03.03.2014, were issued, proposing to make provisional assessment for the quarter ending 30.06.2013 and notice dated 30.09.2013 for the assessment year 2013-2014. The said notice came to be issued for the alleged contravention of Section 12(7) of CST (Registration & Turnover) Rules, 1957 (hereinafter, referred to as 'the Rules'). The petitioner challenged the notice dated 03.03.2014, by filing W.P.(MD) No.5355 of 2014 stating that in view of Rule 10(2) of CST Rules, the provisions of Rule 12(7) of the Rules will not be applicable to the State of Tamil Nadu. Hence, the impugned proceedings of the respondent proposing to make provisional assessment for the quarter ending 30.06.2013 and 30.09.2013 for non- production of declaration in Form-C and F is not unsustainable in law. Further, it is stated that the earlier notice, dated 27.02.2014, has been challenged in W.P.(MD) No.4685 of 2014 and an order of interim stay has been granted by this Court on 18.03.2014 and therefore the impugned proceedings are illegal.
6. The petitioners in W.P.(MD) Nos.4685 and 4686 of 2014 have challenged the notice, dated 27.02.2014, issued by the respondent, by which the respondent requested the petitioners to furnish the details of imports made by them for the assessment years 2011-2012, 2012-2013 and upto December, 2013 for the assessment 2013-2014. Further, a report was directed to be submitted in the form of a computer generated statement taken from the www.icegate.com. The petitioners were informed that in the event of non-production of the computerised statement, it would be presumed that the interstate transaction on which the petitioners have paid either concessional rate of tax or claimed exemption is not in order and the same would be assessed to tax at local VAT rate.
7. The said notice is being challenged stating that the respondent has committed serious error in issuing single notice relating to three assessment years, since every assessment is a separate unit. Further, reliance was placed on the amended Section 22(2) of the TNVAT Act, which was amended with effect from 19.06.2012, whereunder the dealer is deemed to have been assessed for the year on the 31st day of October of the succeeding year and for the assessment years 2011-2012 and 2012-2013 the petitioner's original assessment is deemed to have been completed on 31.10.2012 and 31.10.2013 respectively and there is no jurisdiction to issue notice and the only course open to the respondent is to initiate revision proceedings under section 27 of the TNVAT Act.
8. In another set of writ petitions namely W.P.(MD) Nos.13343 of 2013 etc., batch, the challenge is to the notice, dated 29.07.2013, under CST Act. By the said notice, the respondent proposed to assess the turnover in respect of the interstate transaction and directed the petitioner to produce documents in support of their claim for consessional rate/exemption, as per the returns filed by the petitioner and to submit their objections. In these writ petitions also the very same contention stating that such notice could not be issued in the light of the amended Section 22(2) of the TNVAT Act has been raised.
9. Mr.R.L.Ramani, learned senior counsel, for the petitioners, after elaborately referring to the provisions of the TNVAT Act namely Sections 20, 21, 22, 25 as well as the Rules 8(9) and 8(10) of the Rules, submitted that once the assessment year is over, the power under Section 25 cannot be invoked as it should be within the 1st April to 31st October and the impugned proceedings termed as pre-assessment notices have been issued after the assessment year is over by which the petitioners have been deemed to have been assessed for the relevant year and this aspect was taken note of by this Court while granting interim stay elaborately setting out the contention despite that the respondent repeatedly issuing notices and harassing the dealers. Therefore, it is submitted that such notice cannot be treated to be a notice under Section 25 and the same cannot be done, this power is only available during the current year period. Further, it is submitted that an order under Section 6(A)(2) of the CST Act can be passed at the time of or at any time before the assessment and the date on which the notice was issued is admittedly after the year is over by then the petitioners are deemed to have been assessed and there is no power to issue the pre-assessment notices.
10. Further, it is submitted that on a bare perusal of the impugned notices would show that the petitioners submitted Form-F declarations, which were accepted and examined and there is power to issue fresh notice to re-open the proceedings. In spite of detailed objection in this regard having been submitted to the authorities, one such reply being 06.12.2013, the respondent issued another notice for the assessment year 2012-2013, which was challenged before this Court by filing a writ petition in W.P.(MD) No.19732 of 2013, in which a counter affidavit was filed and by recording the averments in Paragraph No.7 of the counter affidavit, a direction was issued to pass final orders. In spite of the same another set of notices came to be issued. Further, the learned senior counsel submitted that during the pendency of the writ petitions, the petitioners have already submitted all forms and paid appropriate tax and wherever forms are not available, the petitioners are willing to pay the tax and therefore the petitioners should be protected from such harassment of being repeatedly issued notices.
11. The learned senior counsel placed reliance on the decisions of this Court in the cases of Mahendrakumar Ishwarlal & Co. v. Dy. Comml. Tax Officer, reported in 1971 (28) STC 549, for the proposition that the assessing authority cannot assess provisional once the year is over and once when the return in the prescribed form is before him for purposes of processing through the assessment. Further, the learned senior counsel placed reliance on the decision of the Honourable Division Bench of this Court in the case of State of Tamil Nadu v. Wander Limited, reported in 1990 (79) STC 421, for the proposition that it is not open to the Revenue to pass a provisional order of assessment after the end of the assessment year.
12. Further, the learned senior counsel placed reliance on the decision of the Honourable Supreme Court in the case of Ashok Leyland Ltd. v. State of Tamil Nadu, reported in 2004 (134) STC 473, with regard to the scope of Section 6(A) of CST Act and submitted that all the requisite particulars have been furnished and once a determination is made that such statements are correct, the curtain is drawn keeping in view of the expression 'there upon' used in Section 6(A)(2) of CST Act.
13. Mr.Raja Karthikeyan, learned Additional Government Pleader, for the respondent submitted that the deemed assessment is not an automatic and in this regard if Section 22(2) of TNVAT Act is carefully scrutinized, there are conditions and only upon fulfilling such conditions, the dealer is entitled to be deemed to be assessed. Further, it is submitted that the notice, dated 26.07.2013, is before the end of the year and issued under Section 22(4) of TNVAT Act. Further, the learned counsel referred to Section 25 of the Act relating to the provisional assessment and also the notice issued by the respondent dated 04.03.2014. It is further submitted that the dealer is bound to submit declaration forms within the time and the State Investigation Wing verified the premises of the petitioners at Puducherry and shocked to know that it was a very small premises of an area of 100 sq.ft., and therefore the Department should be allowed to pursue the matter further and the dealers should be directed to submit their explanation to the impugned proceedings, which is only a notice.
14. Further, it is submitted that though the impugned notices have been stated as pre-assessment notices, the nomenclature will not vitiate the entire proceedings and the dealer is bound to co-operate with the department and even now they are not co-operating. Further, it is submitted that the respondent called for the details from the particular website, since the dealers did not co-operate with the department and they have secured the information from the Customs Department. It is further submitted that the assessment year in dispute in the writ petitions relates to 2013-2014 and as required under Rule 12(7) of the CST Rules, the respondent issued the impugned notices requesting the petitioner to produce Form-C and F declarations and also the documents relating to High Sea sales as declared by the petitioners through their monthly returns in Form-1 of the CST Act.
15. It is further submitted that the petitioners have claimed concessional rate of tax on their interstate sales of goods at 2% against Form-C declarations and also claimed exemption on the stock transfer/consignment sales against Form-F declarations. Apart from that the petitioners have effected High seas sales during the subject assessment years and the same is claimed exemption, but without submitting the relevant documents as prescribed under Section 21 of TNVAT Act. Therefore, the respondent issued the impugned notices to the petitioners and requested them to file the relevant documents and declarations under Section 25 of TNVAT Act r/w Section 9(2) of CST Act coupled with Rule 12(7) of CST Act. Therefore, it is submitted that the notices are in accordance with law and the petitioners are bound to furnish the details called for.
16. Further, it is submitted that under TNVAT act r/w Section 9 (2) of CST Act, there are two charging Sections available for finalization of original assessment order namely the Assessing Officer may decide the deemed self- assessment order as per Section 22(2) of TNVAT Act or the Assessing Officer may reject the returns filed by the dealers and thereby pass best judgment assessment as per Section 22(4) of TNVAT Act from the assessment years 2012- 2013 onwards. It is further submitted that the deemed self-assessment order under Section 22(2) of TNVAT Act is not automatic one, but subject to the conditions that (i) the dealer shall file returns within time as prescribed and in prescribed manner, (ii) the dealer shall pay tax as per return, (iii) the dealer shall file necessary prescribed documents. Unless and until all the requirements are complied with by the dealer, they are not eligible to be assessed under the deemed self-assessment and in such circumstances, the assessing officer can invoke best judgment assessment under Section 22(4) of TNVAT Act. Further, it is submitted that both the assessment under Section 22(2) or 22(4) is operative only after completion of the assessment year to which it relates.
17. Further, it is submitted that the petitioners have not complied with the requirements under Section 22(2) of the Act and failed to file documents/declarations as required under Rule 12(7) of CST Act and Rule 5 of CST Act and therefore the petitioners are not eligible to finalize their assessments under deemed self-assessment. It is further submitted that the petitioners have not filed the returns along with the documents prescribed and thus they have filed incorrect and incomplete returns and hence they are not eligible for deemed self-assessment. Therefore, it is submitted that the respondent rightly invoked the power under Section 25 of TNVAT Act read with Section 9(2) of CST Act and Rule 5 of CST Rules and requested the documents prescribed, which is only in accordance with law.
18. Further, the learned Additional Government Pleader relied upon the decision of the Honourable Division Bench of this Court in the case of W.A.No.229 of 2007 in Sri Krishna Industries vs. The Additional Deputy Commercial Tax Officer and another, dated 09.07.2007, wherein the challenge to the similar pre-revision notice was rejected by the Honourable Division Bench and in doing so, the Honourable Division Bench referred the decision of the Honourable Supreme Court in the case of Union of India v. Tata Engineering and Locomotive Co., Ltd., reported in AIR 1998 SC 287. Further, the learned Additional Government Pleader relied on the decision of this Court in W.P.(MD) No.6137 of 2008, dated 07.07.2010, in the case of Priya Mills Pvt., Ltd., v. The Assistant Commissioner and another and submitted that the impugned proceedings being only pre-assessment notices, the writ petitions challenging the same are not maintainable. On the above grounds, the learned Additional Government Pleader sought to sustain the impugned notices.
19. In reply, the learned senior counsel referred to the Circular bearing No.7/2014, issued by the Principal Secretary / Commissioner of Commercial Taxes, dated 03.02.2014, with regard to the revision of assessment and submitted that the impugned notices are contrary to the Circular.
20. Heard the learned counsel for the parties and perused the materials placed on record.
21. The case of the petitioners is that they have filed monthly returns under the provisions of CST Act for the assessment years 2011-2012, 2012-2013 and 2013-2014 reporting their total taxable turnover. The petitioners claimed concessional rate of tax on interstate transactions against Form-C declaration and claimed exemption under Section 5(2) of CST Act on the sales in the course of import and on their branch transfer/consignment sale under Section 6(A) of CST Act. It is their further case that as per Section 22(2) of TNVAT Act, the assessing authority shall accept the returns submitted by the dealer and pass an order of assessment (self-assessment). However, after the Amendment Act, 23 of 2012, the dealer is deemed to have been assessed as for the year as per the returns on the 31st day of October of the succeeding year. Therefore, the petitioners would contend that for the assessment years 2011-2012 and 2012-2013, the petitioners original assessment has been deemed to have been completed on 31.10.2012 and 31.10.2013 stating that the impugned notices have been issued in violation of the mandatory provisions of the Amended Act. The petitioner challenged the same in W.P.(MD) No.13349 of 2013 and an order of interim stay has been granted.
22. The pre-assessment notice issued under CST Act for the assessment year 2012-2013 has been challenged on the ground that the respondent cannot issue any notice for the said assessment year. However, once again another notice came to be issued, which has been challenged in W.P.(MD) No.19732 of 2013. When the writ petition was pending, a representation was filed before the Joint Commissioner (CT) Tirunelveli Division to direct the respondent to take the final assessment for the pending assessment years both under TNVAT Act and CST Act. The Joint Commissioner by proceedings, dated 20.12.2013, directed the respondent to complete the pending assessing and report compliance by 31.12.2013. A counter affidavit was filed by the respondent stating that the claim of exemption made by the petitioner in the monthly return was found to be admitted and liable to be accepted. Recording the same, the writ petition was disposed of on 06.02.2014. The petitioner would state that without passing final orders, the respondent issued the another set of notices calling upon the petitioners to furnish the details of import made during assessment years 2011-2012, 2012-2013 and 2013-2014. This notice is said to be legally not sustainable.
23. Section 20 of TNVAT Act, which deals with assessment of tax, stating that the tax under the Act shall be assessed, levied and collected in such manner as may be prescribed. Section 21 deals with filing of returns, where every dealer registered under the Act shall file return, in the prescribed form showing the total and taxable turnover within the prescribed period in the prescribed manner, along with proof of payment of tax. The tax under this Section shall become due without notice of demand to the dealer on the last date of the period for filing return as prescribed. This provision is as per the amendment by Act 23 of 2012 with effect from 19.06.2012.
24. Section 22 as amended by Act 23 of 2012 deals with deemed assessment and procedure to be followed by assessing authority. Sub-section (1) to Section 22 states that the assessment in respect of the dealer shall be on the basis of return relating to his turnover submitted in the prescribed manner within the prescribed period. Sub-section (2) as substituted by the Amendment Act, 23 of 2012, states that the assessing authority shall accept the returns submitted for the year, by the dealer if the returns are accompanied by the proof of payment of tax and every such dealer shall be deemed to have been assessed for the year on the 31st day of October of the succeeding year. The proviso states that in respect of such returns submitted for the years 2006- 2007, 2007-2008, 2008-2009, 2009-2010 and 2010-2011, on which assessment orders are not passed shall be deemed to have been assessed on the 30th day of June, 2012.
25. Section 25 deals with procedure to be followed in assessment of certain cases. In terms of sub-section (1), if any dealer who is liable to pay tax under this Act fails to submit return within the prescribed period, or if the return submitted by him appears to the assessing authority to the incomplete or incorrect, the assessing authority may, after making such enquiry as it considers necessary, determine provisionally the tax payable by the dealer to the best of its judgment. Provided that, before taking action under this sub-section on the ground that the return submitted by the dealer is incomplete or incorrect, the dealer shall be given a reasonable opportunity of providing the correctness or completeness of the return submitted by him.
26. Section 27 deals with assessment of escaped turnover and wrong availment of input tax credit and under sub-section (1) of Section 27 the assessing authority may, subject to the provisions of sub-section (3), at any time within a period of six years from the date of assessment, determine to the best of its judgment the turnover which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary, in cases, the dealer has been assessed at a rate lower than the rate at which it is assessable.
27. Rule 7 of TNVAT Rules prescribes filing of returns. Rule 8 deals with procedure for assessment, sub-rule (9) of Rule 8 states that where a registered dealer is deemed to have been assessed under the Act, the assessing authority shall not be required to issue any assessment order or intimation to the dealer. This provision has been inserted by a notification, dated 19.06.2012, with effect from that date. Sub-rule (1) of Rule 8 states that the deemed date of service of the deemed assessment order shall fall on the 31st day of October of the succeeding year. Proviso to the said sub-rule provides that in respect of the assessments pending for the years 2006-2007, 2007-2008, 2008-2009, 2009-2010 and 2010-2011, the deemed date of service of the deemed assessment order shall fall on the 30th day of June, 2012.
28. In terms of Section 9 (2-A) of CST Act states that all the provisions relating to offences interest and penalties including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in Sections 10 and 10-A of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re-assessment collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law. Therefore, the provisions of TNVAT Act will apply in respect of the assessment and enforcement of the provisions of the CST Act.
29. Above are the statutory provisions pertaining to the issue raised in all these writ petitions. The contention of the learned senior counsel in W.P.(MD) No.5355 of 2014 and related cases, which arise under CST Act is that the impugned notices in all those writ petitions have been issued in violation of the stay granted by this Court in W.P.(MD) No.4686 of 2014 and that the respondent proposing to make provisional assessment for the quarter ending 30.06.2013 and 30.09.2013 for non-production of the C and F Declaration Forms is unsustainable in law.
30. In W.P.(MD) Nos.4685 & 4686 of 2014, the contention raised is that as per the amended Section 22(2) of TNVAT Act, every dealer is deemed to have been assessed for the year on the 31st day of October of the succeeding year. Therefore, for the assessment years 2011-2012 and 2012-2013, the petitioner's original assessment is deemed to have have been completed on 31.10.2012 and 31.10.2013 respectively accepting the returns filed and taxes paid and there cannot be any further original assessment and the only course open to the respondent is to initiate revision proceedings under Section 27 of TNVAT Act.
31. In W.P.(MD) No.4685 of 2014, it is contended that when the respondent proposed to make an original assessment for CST 2012-2013 contrary to the amendment to Section 22(2) of TNVAT Act, the same was challenged in W.P.(MD) No.13349 of 2013 and stay has been granted. Therefore, calling upon the petitioner to produce details of import more specifically in relation to the assessment year 2012-2013 amounts to contempt of court. The further contention has been raised by stating that the impugned notices have been termed as 'pre-assessment notices' and the same cannot be done and the entire proceedings have to be quashed.
32. It is to be noted that the learned Additional Government Pleader appearing for the respondent submitted that the assessing authority shall accept and pass orders once returns are filed and in order to overcome any administrative delay in the issue of orders, the deeming provision was brought out in the said VAT Act. At the same time, the dealers need to prove their claim of benefits of reduced rate or exemption from tax, and the entire burden falls on the assesses to file those documents and declaration forms within the prescribed period (three months) from the date of sale as per Rule 12(7) or if the assessing authority permits such further period on finding sufficient cause for the late filing of such documents or declarations under the provisions of Section 8(4) of CST Act, otherwise the dealer is liable to pay higher rate of tax.
33. It is relevant to note that the impugned proceedings are only notices. The petitioners would state that the impugned proceedings are termed as 'pre- assessment notices' and the same are illegal and without jurisdiction. It is settled legal principle that mere wrong nomenclature or quoting of wrong provision will not vitiate the entire proceedings. The contents of the notices would be relevant than the nomenclature or the provision quoted in the notice. With this principle in mind if the impugned proceedings are seen they are only notices and the petitioners/dealers have been called upon to respond to the notices. The various factual averments, which have been placed before this Court including the jurisdictional could very well be raised before the assessing authority. It cannot be stated that the question of jurisdiction raised by the petitioners in these writ petitions are pure question of law rather the jurisdictional question is a mixed question of law and fact. This Court is inclined to say so in the light of Section 22(2) of the Act.
34. As noticed above, Section 22 TNVAT Act deals with deemed assessment and procedure to be followed by assessing authority as substituted by Act 23 of 2012, with effect from 19.06.2012. Sub-section 2 of Section 22 would be relevant, which imposes duty upon the assessing authority to accept the returns submitted for the year by the dealer. However, such acceptance is not unconditional or absolute as the statute states that such acceptance of the returns would arise if the returns are in the prescribed form and accompanied with the prescribed documents and proof of payment of tax. While on this issue, it would relevant to note Section 21 of the Act, which deals with filing of returns, which also compels the registered dealer to file the return in the prescribed form showing the total and taxable turnover within the prescribed period, in the prescribed manner along with the prescribed documents and proof of payment of tax. This important aspect, which finds place in the statute cannot be ignored. If the sub-section (2) of Section 22 as amended is read without reference to these phrases 'accompanied with the prescribed documents and proof of payment of tax', the situation may be disastrous and it would amount to extending the relief not intended by the statute.
35. In the notice, dated 26.07.2013, for the assessment year CST 2012-2013, on consideration of the total taxable turnover reported by the dealer claiming exemption in their monthly return in Form-I, the assessing authority has taken up the return for verification and found that the dealer has effected interstate transaction and that documents have been filed only in respect of the claim for concessional rate and documents in respect of the claim for exemption, have not been substantiated by any supportive documents relevant as required under Section 5(1) of CST Act. Therefore, the proposal has been made to assess the total taxable turnover as shown in the impugned notice, dated 26.07.2013.
36. In the notice, dated 26.07.2013, for the assessment year 2011-2012, the assessing officer pointed out that the dealer has not filed any documents in respect of the claim of exemption as per the returns filed and therefore proposed to reassess the turnover. Similar is the proposal in the notice for the assessment year CST 2012-2013. Therefore the dealer ought to have responded to the notice and if it is the contention that such a notice could not have been issued, then it was well open to the dealer to raise such objection.
37. The learned senior counsel in the course of arguments submitted that though the writ petitions were pending and interim orders were granted, the dealer furnished certain details and records in respect of their claim and stock transfer as per Section 6(A) of CST Act and requested for an opportunity of personal hearing to be afforded to clarify the details.
38. The learned Additional Government Pleader, on instructions, submitted that on verification of documents and records produced, it has been found that the goods did not enter Kerala State and there are serious discrepancies pointed out in the report submitted by the State Intelligence Wing. However, at this stage of the matter, this Court is not inclined to go into those aspects. Having held that the nomenclature of the notices would not vitiate the proceedings, it has to be seen as to whether this Court could exercise jurisdiction and quash the notices at the very threshold. It has already been noted that the challenge regarding jurisdiction to issue the impugned notices, is on mixed question of fact and law coupled with the legal aspect as to whether a dealer would automatically be entitled to the benefit of deemed assessment if he has not fulfilled the conditions under Section 22(2) of the Act.
39. The Honourable Supreme Court in the case of Union of India (cited supra) pointed out a writ petition should not have been entertained by the High Court as the assessing authority is entitled to complete the assessment as he thinks fit in exercise of his judgment and according to his understanding of the law and facts and for which purpose, he can call for and examine whatever documents he considers relevant. It was further pointed out that if the assessing authority fails to follow any judgment of the High Court or Supreme Court, the assessee had adequate statutory remedy by way of an appeal and revision against the assessment order. Therefore, the Court should not try to control the mode and manner in which an assessment should be made. It was pointed out that if the assessing authority is of the view that the enquiries are necessary to be made as to the price at which trucks were sold at the regional sales offices, the Court cannot stop him from making such enquiries. A similar complaint as made in these cases was also submitted before the Honourable Supreme Court complaining that assessments are going an endlessly. In the instant case, the complaint is notice after notice were issued by the assessing officer considering such a complaint. In that context, the Honourable Supreme Court observed that the assessing authority will have to decide all questions of fact and law, he has to make whatever enquiries he thinks necessary for determination of the value of excisable goods and the High Court in exercise of its jurisdiction cannot give guidance to the assessing authority about the manner and mode in which the assessment should be made.
40. Consistently, this Court has been taking a view that a writ petition challenging a notice is not maintainable unless it is shown that it is palpably without jurisdiction, arbitrary or unreasonable and to arrive at such a finding there should not be any disputed question of fact or long drawn reasoning and in such cases, the party should be directed to respond such a notice. In the instant case, the notices are pursuant to the information furnished by the assessee in it's returns. The first question would be whether the assessee's returns was in accordance with Section 22(2) of TNVAT Act to be entitled to the benefit of such deemed assessment as on 31st day of October of the succeeding year. This could be established by producing documents or placing facts or stating that already facts and documents are on file. This aspect cannot be adjudicated in a writ petition and the matter cannot be fore-closed at the threshold since the dealers are bound to satisfy the assessing authority that the returns submitted for the year was in the prescribed form and accompanied with the prescribed documents.
41. In the light of the above discussions, this Court is of the view that the impugned notices cannot be interfered by issuing a writ of certiorari and the petitioners should be directed to respond to the notices.
42. The learned senior counsel at the conclusion of the arguments submitted that though the issues were being agitated before this Court and writ petitions were pending, the petitioners have furnished the documents, remitted taxes wherever they were unable to produce documents, have agreed to pay the taxes. If that be the case, it is all the more a reason, that the petitioners should respond to the impugned notices by submitted their objections/replies before the authority.
43. In the result, all these writ petitions fail and they are dismissed. The petitioners are directed to submit their objections along with the documents, records, etc., to the respondent within a period of thirty days from the date of receipt of a copy of this Order. On receipt of the same, the respondent shall afford an opportunity of personal hearing to the petitioners and decide the matter on merits and in accordance with law, by passing a reasoned order, within a period of sixty days from the date on which the personal hearing stands concluded. Till fresh orders are passed, the respondent shall not take any coercive action for recovery against the petitioners. Consequently, connected miscellaneous petitions are closed. No costs.
19.09.2014
Internet : Yes / No
Index : Yes / No
krk
To:
The Commercial Tax Officer-1,
Virudhunagar Assessment Circle,
Virudhunagar.
T.S.SIVAGNANAM, J
krk
PRE-DELIVERY ORDER
IN
W.P.(MD) Nos.5355, 5356, 5357, 5358, 5359, 5360, 4685 & 4686 of 2014 and W.P.(MD) Nos.13343, 13344, 13345, 13346, 13347, 13348, 13349, 14400, 14401, 14398 & 14399 of 2013 19.09.2014