M/S S.S.Steel Traders, v. The Commissioner Tax Officer,
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 13.06.2017 Coram THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU W.P.No.9753 of 2017 and W.M.P.Nos.10730 & 10731 of 2017 M/s.S.S.Steel Traders, Represented by its Proprietrix, Mrs.S.Zereena Begam, No.142, Gingee Road, Tindivanam - 604 001.
...Petitioner
Vs.
The Commercial Tax Officer, (Addl.) Tindivanam Assessment Circle, Tindivanam - 604 001.
...Respondent
Writ Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, to call for the impugned proceedings of the respondent in TIN/33384723152/2015-16 dated 26.09.2016 and quash the same as passed contrary to the provisions of the TNVAT Act and against the principles of natural justice.
For Petitioner: Mr.P.Rajkumar For Respondent: Mr.S.Kanmani Annamalai Additional Government Pleader
O R D E R
The petitioner is aggrieved against the order of assessment dated 26.09.2016 passed in respect of assessment year 2015-16.
2. The case of the petitioner is that the Assessing Officer has taken up the report of the Enforcement Wing alleging stock variation and the admission made by the petitioner to that effect, as the sole basis for passing the assessment without there being any independent application of mind, more particularly, on the issue as to whether the physical stock
verification was done at the time of inspection or not. Therefore, it is contended that the Assessing Officer is not justified in imposing tax and penalty based on such report of the Enforcement Wing, more particularly, when the petitioner has explained in their reply as to under what circumstances such admission was made. It is the further case of the petitioner that the alleged stock variation is only notional arrived from notional profit and loss account and there was no physical verification of the stocks at that point of time. Thus, it is contended that the Assessing Officer, based on such notional figure of variation, is not entitled to pass the assessment order.
3. The learned Additional Government Pleader appearing for the respondent pointed out that the petitioner having accepted the stock difference before the Enforcement Wing, has chosen to give the reply to the notice of proposal claiming the difference as the notional only as an after thought in order to avoid the payment of tax. Therefore, he submitted that the Assessing Officer cannot be found fault with in passing the order of assessment.
4. Heard both sides.
5. Perusal of the impugned order would show that the same came to be passed based on the issue of sales suppression. The Assessing Officer solely relied on the report of the Enforcement wing and the admission of the petitioner before such Enforcement wing with regard to stock difference. However, a perusal of the reply filed by the petitioner dated 06.08.2016 in response to the notice of proposal would show that the petitioner has not accepted the stock difference and on the other hand, it is their categorical case that the stock deficit found was only a notional figure arrived from notional profit and loss account and the acceptance made by them before the Enforcement wing was only to purchase peace.
Therefore, it is clear that the case of the petitioner is that the stock difference is notional and not based on real and physical verification. Needless to say that the Assessing Officer being a quasi-judicial authority has to independently apply his mind and arrive at a conclusion based on the report filed by the Enforcement wing and the reply filed by the petitioner to the notice of proposal.
6. In this case, the Assessing Officer has not resorted to do so and on the other hand, he imposed the tax and penalty by holding that there was sale suppression, simply by relying on the report of the Enforcement wing. Therefore, I am of the view that the Assessing Officer has to re-consider the whole issue afresh based on the objections raised by the petitioner and pass fresh order of assessment by independently applying his mind to
the facts and circumstances of the case, also by giving personal hearing to the petitioner. Accordingly, the Writ Petition is allowed and the impugned order is set aside. Consequently, the matter is remitted back to the Assessing Officer to re-do the assessment as stated supra within a period of four weeks from the date of receipt of a copy of this order. It is made clear that this Court is not expressing any view on the merits of the claim made by the petitioner as it is for the Assessing Officer to consider and decide. No costs. Consequently, connected miscellaneous petitions are closed.
Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar vsi/raja To The Commercial Tax Officer, (Addl.) Tindivanam Assessment Circle, Tindivanam - 604 001.
+1cc to Mr.P.Rajkumar, Advocate Sr.41635 +1cc to the Special Government Pleader Sr.41747 W.P.No.9753 of 2017 and W.M.P.Nos.10730 & 10731 of 2017 ca[co] srg 20/06/2017