Tvl.Maruthi Trading Corporation vs. The Assistant Commissioner (CT)

Facts

The petitioner, Tvl. Maruthi Trading Corporation, a registered contractor providing street light maintenance services, filed a writ petition challenging an assessment order dated 06.06.2023 passed by the Assistant Commissioner (CT), Theni-I Circle. The impugned order demanded Rs. 77,50,180/- due to a turnover mismatch for the financial year 2020-21. The petitioner claimed a turnover of Rs. 62,92,708/-, while the Kodaikanal Municipality (second respondent) had initially reported the petitioner's turnover as Rs. 2,62,45,600/-. The petitioner obtained a fresh certificate from the Municipality and sought to submit it before the assessing authority. The Municipality, in its counter affidavit, admitted that its tax consultant mistakenly reported the higher turnover, leading to the impugned order.

Held

The Court allowed the writ petition, setting aside the impugned assessment order dated 06.06.2023. The Court found merit in the petitioner's submission and the admission made by the second respondent (Kodaikanal Municipality) in its counter affidavit. The Municipality acknowledged that a mistake was made by its tax consultant in reporting the petitioner's turnover, which led to the erroneous demand by the first respondent. The Court reasoned that it would be unjust to uphold an order based on demonstrably incorrect figures, especially when the error was admitted by the party that provided the incorrect information. Consequently, the Court directed the first respondent (Assistant Commissioner (CT)) to redo the assessment for the year 2020-21. This re-assessment is to be conducted after considering the fresh certificates issued by the second respondent and by providing a reasonable opportunity of hearing to the petitioner. No costs were awarded.

Key Issues

1. Whether the assessment order dated 06.06.2023, passed by the Assistant Commissioner (CT), Theni-I Circle, is illegal and devoid of merits, considering the admitted mistake in the turnover reported by the Kodaikanal Municipality? Petitioner's Contention: The petitioner argued that the assessment order was passed based on an erroneous turnover figure reported by the Kodaikanal Municipality, which was later corrected by the Municipality itself. The petitioner sought to quash the impugned order and requested a re-do of the assessment after providing a reasonable opportunity to present the corrected information. Revenue's Contention: The Assistant Commissioner (CT) did not file a separate counter affidavit. However, the Kodaikanal Municipality, the second respondent, filed a counter affidavit admitting that its tax consultant mistakenly reported the petitioner's turnover as Rs. 2,62,45,600/- instead of the correct figure of Rs. 62,92,708/- for the year 2020-21. The Municipality stated that the impugned order should be modified based on this admission.