M/S.V.R.Anbu And Bros. vs. The Principal Commissioner And Commissioner Of Commercial Taxes

Facts

The petitioner, M/s.V.R.Anbu & Bros., challenged two assessment orders dated 16.09.2019 passed by the State Tax Officer-1, Virudhunagar, for the assessment years 2013-2014 and 2014-2015. These orders stemmed from an inspection conducted between 24.10.2014 and 27.10.2014, following which revision notices were issued on 02.08.2018. The petitioner had requested the Principal Commissioner and Special Commissioner of Commercial Taxes to appoint a Joint Commissioner to examine the legality of the re-assessment proceedings, citing a similar administrative order in the case of Tvl. Madras Cements Limited. However, the State Tax Officer proceeded to pass the impugned orders without awaiting a decision on this request or a detailed reply on merits.

Held

The Court held that the impugned assessment orders dated 16.09.2019 for the assessment years 2013-14 and 2014-15 were liable to be quashed. The Court found that the petitioner had requested the appointment of a Joint Commissioner to arbitrate the legality of the revision notices, and this request was pending. The Court noted that the second respondent passed the impugned orders without awaiting a decision on this representation or a detailed reply on merits. The Court observed that the TNVAT Act, 2016, does not contemplate the appointment of an arbitrator for such matters, and the petitioner resorted to dilatory tactics. However, the Court also found that the second respondent should have informed the petitioner that the case was being taken up for hearing and that there was no question of appointing an arbitrator. Therefore, the Court quashed the assessment orders and remitted the case back to the second respondent. The petitioner was directed to file a reply to the revision notices within 30 days, and the second respondent was directed to pass a speaking order on merits within 60 days. The impugned assessment orders were to be treated as corrigenda to the revision notices.

Key Issues

1. Whether the assessment orders dated 16.09.2019 are liable to be quashed for being passed without considering the petitioner's request for appointment of a Joint Commissioner as an arbitrator to examine the legality of the revision notices, thereby violating principles of natural justice and quasi-judicial functioning? (Relates to principles of natural justice and quasi-judicial assessment). Petitioner's Arguments: - The impugned assessment orders are unsustainable as they were passed without awaiting the decision on the petitioner's request for appointing a Joint Commissioner to arbitrate the legality of the revision notices, which were based on inflated proposals from the Enforcement Directorate. - The assessing officer, being a quasi-judicial authority, is not bound by directions of higher authorities and should have applied independent mind, as held in Madras Granites (P) Limited vs. Commercial Tax Officer. - The petitioner relied on Mahadayal Premchandra vs. Commercial Tax Officer, Calcutta and others, to argue that the assessing officer did not exercise independent judgment. - The petitioner sought quashing of the orders, arguing that the assessing officer should have put them on notice before passing the orders if the adjournment request was to be disallowed. Respondents' Arguments: - The respondents argued that the petitioner had not filed a reply on merits to the revision notices and should have availed the statutory remedy of appeal before the Appellate Commissioner under Section 51 of the TNVAT Act, 2006.