Tvl. Kanagavalli Mattu vs. The Commercial Tax Officer

Held

The Court held that the notice issued by the respondent on 30.06.2014 was premature and unsustainable in law, as it was issued before the deemed date of assessment of 31.10.2014. The Court found that the respondent's order was a cryptic, non-speaking order that failed to address the specific objections raised by the petitioner regarding the erroneous method adopted by the Enforcement Wing Officers for calculating stock differences. The respondent's observation, "Whatever it may be," indicated awareness of a potential wrong method, yet the objections were overruled without justification or explanation of how the cited judgments were inapplicable. This failure to provide reasons for rejecting the petitioner's objections constituted a clear violation of the principles of natural justice. Consequently, the impugned order was set aside, and the matter was remitted back to the respondent for fresh consideration. The Court also directed the respondent to consider the 10% tax demand already paid by the petitioner pursuant to an interim stay.

Facts

The petitioner, Tvl.Kanagavalli Mattu Theevanam Angadi, a dealer in cattle feed and cement, filed returns for the assessment year 2013-2014 under the Tamil Nadu Value Added Tax Act, 2006. The petitioner reported a total and taxable turnover of Rs.1,18,43,863/- and paid the due tax after availing input tax credit. Returns are deemed assessed after 31.10.2014 unless an assessment order is passed. No such order was passed. However, on 30.06.2014, the respondent, The Commercial Tax Officer, issued a notice based on an inspection by Enforcement Wing Officers, proposing adjustments for stock differences. The petitioner objected on 30.08.2014, arguing the notice was premature as the assessment year was not complete and the method used by the Enforcement Wing was erroneous, citing judicial precedents. The respondent passed a final order on 19.11.2014 without providing reasons for overruling the objections, leading the petitioner to file this writ petition challenging the order.

Key Issues

1. Whether the notice issued by the respondent on 30.06.2014, proposing stock differences and penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006, was premature, given that the deemed date of assessment for the assessment year 2013-2014 was 31.10.2014? The petitioner argued it was premature. The respondent contended that under Section 22(4) of the Act, best judgment assessment can be made at any time. 2. Whether the final order dated 19.11.2014, passed by the respondent, is illegal and violative of the principles of natural justice for failing to consider the petitioner's objections regarding the erroneous method adopted by the Enforcement Wing Officers and for being a cryptic, non-speaking order? The petitioner argued it was a violation of natural justice. The respondent argued that an alternative remedy of appeal under Section 51 of the Act was available, and the writ petition was not maintainable as the petitioner sought to avoid the statutory deposit.