M/S. Baskar Cements And Products vs. The Assistant Commissioner (St)

Facts

The petitioner, M/s. Baskar Cements & Products, represented by its Managing Partner, filed a writ petition challenging an order dated 07.10.2022 passed by the Assistant Commissioner (ST), Karur. The petitioner's primary contention was that the Assessing Officer rejected their response to a show cause notice solely on the ground that the objections were not raised before the inspecting officer during an inspection, even though the petitioner had responded to the notice. The impugned order stated that the petitioner's explanation regarding invisible loss of raw materials during manufacturing and the stock book was not accepted because these reasons were not presented to the inspecting officers during the week-long inspection. The petitioner argued that this rejection was arbitrary and vitiated the quasi-judicial nature of the assessment.

Held

The Court held that the Assessing Officer's rejection of the petitioner's objections was vitiated because it was based on the premise that the objections were not submitted before the inspecting officer. The Court emphasized that the assessment function is quasi-judicial and must be performed independently. It found that the Assessing Officer failed to apply their mind independently to the objections and materials presented by the petitioner. Consequently, the impugned order was set aside. The Court granted the petitioner one more opportunity to submit their objections before the Assessing Officer within two weeks. The Assessing Officer was directed to consider these objections and any produced materials independently and pass orders within eight weeks, after granting a reasonable opportunity to the petitioner. The ratio decidendi is that an Assessing Officer cannot reject objections solely because they were not raised during the inspection phase, as the assessment itself is a quasi-judicial process requiring independent consideration of all submissions.

Key Issues

1. Whether the Assessing Officer erred in rejecting the petitioner's objections on the ground that they were not raised before the inspecting officer, thereby vitiating the quasi-judicial assessment proceedings? (Question of law and fact, concerning principles of natural justice and proper assessment procedure). Petitioner's arguments: The petitioner contended that the Assessing Officer acted improperly by rejecting their reply to the show cause notice. They argued that the Assessing Officer's reasoning, that objections must be raised before the inspecting officer and not subsequently before the Assessing Officer, was flawed. The petitioner asserted that the assessment function is quasi-judicial and requires independent application of mind by the Assessing Officer to all objections and materials presented, irrespective of when they were initially raised during the inspection phase. They relied on the principle that assessment is a quasi-judicial function. Respondent's arguments: The respondent did not present any arguments in the judgment.