Tvl. Thirumalai Chemicals v. The Assistant Commissioner(Ct)

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 18.01.2021

CORAM:

THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P.Nos.9503 & 9504 of 2015 and M.P.Nos.1 & 1 of 2015 Tvl.Thirumalai Chemicals Limited, Represented by its Authorized Representative, N.Nambirajan, No.25-B, Sipcot Industrial Complex, Ranipet - 632 403, North Arcot District.

... Petitioner in both W.Ps.

Vs.

1.The Assistant Commissioner (CT), Ranipet (Sipcot) Assessment Circle, Ranipet (Sipcot).

2.The Appellate Deputy Commissioner (CT), Commercial Taxes Buildings, Vellore .... Respondents in both W.Ps.

Prayer in W.P.No.9503 of 2015: Writ Petition is filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus, to call for the records on the files of the 2nd respondent in N.Dis.272/2015 (TNGST) dated 27.02.2015 and connected proceedings of the 1st respondent in TIN.33274360093/2006-2007 dated 28.01.2015 and quash the same and further direct the 1st respondent to pass order afresh in accordance with law.

Prayer in W.P.No.9504 of 2015: Writ Petition is filed under Article 226 of the Constitution of India praying for the issuance of Writ of Certiorarified Mandamus, to call for the records on the files of the 2nd respondent in N.Dis.273/2015 (VAT) dated 27.02.2015 and connected proceedings of the 1st respondent in TIN.33274360093/2006-2007 dated 28.01.2015 and quash the same and further direct the 1st respondent to pass order afresh in accordance with law.

For Petitioner :Mr.R.Senniappan (in both W.Ps) For Respondents : M/s.G.Dhanamadhri (in both W.Ps) Government Advocate (T) C O M M O N O R D E R Heard Mr.R.Senniappan, learned counsel for the petitioner and Mrs.G.Dhanamadhri, learned Government Advocate appearing for the respondents and with the consent of either side, the writ petition is taken up for disposal.

2.The petitioner is a dealer in hides and skins and is an assessee on the file of the first respondent herein under the provisions of the Tamil Nadu Value Added Tax Act, 2006 [TNVAT Act]. In this writ petition, the petitioner questions the order passed by the second respondent who is the appellate authority, who has rejected the petitioner's appeal petition in A.P.VAT No.73/2015 by order dated 10.05.2016 as not entertainable. 3.The facts which are relevant for the disposal of these writ petitions are that the petitioner was issued a revision notice for the year 2012-13 proposing to revise the total and taxable turn over of the petitioner, apart from proposing to reverse the Input Tax Credit and imposing penalty. The petitioner submitted their objections and the Assessing Officer completed the assessment and passed an order on 30.12.2014.

Thereafter, the petitioner filed an application on 22.01.2015 requesting for rectification of certain mistakes which have crept in the order of assessment. These petitions were presented under Section 84 of the TNVAT Act. Several issues were pointed out in the said petition, which were considered by the Assessing Officer and the Assessing Officer passed an order dated 03.03.2015.

4.The learned counsel appearing for the petitioner as well as the learned Government Advocate (T) appearing for the respondents would admit that except for one issue pertaining to invisible loss, all other issues which were brought to the notice of the first respondent in the rectification petition were considered and a decision was taken in favour of the petitioner. Only with regard to the issue pertaining to invisible loss, the petitioner's grievance is that a proper finding was not given by the Assessing Officer. Therefore, the petitioner preferred an appeal to the second respondent by appeal petition dated 23.03.2015. This appeal petition has been rejected as not entertainable by the second respondent/Appellate Authority by the impugned order.

5.On perusal of the impugned order, it is seen that the Appellate Authority, after extracting the grounds of appeal, has devoted more than 4 to 5 paragraphs of the order commenting upon the action initiated by the Assessing Officer in the petition filed by the petitioner under Section 84 of the TNVAT Act. In my view, this was uncalled for, since the appeal is by the dealer and not by the revenue. Therefore, all that the Appellate Authority should have seen in the appeal petition was to examine whether the petitioner has made out any grounds to interfere with the assessment order, only with regard to the points which have been held against the petitioner. 6.

In other words, what can be seen by the Appellate Authority is with regard to the correctness of the order passed by the Assessing Officer, which is not to the satisfaction of the dealer. This is so because the revenue did not prefer any appeal against the order passed by the Assessing Officer entertaining the petition under Section 84 of the TNVAT Act and rectifying the mistakes in the assessment order dated 30.12.2014. Thus, the exercise adopted by the second respondent was uncalled for.

7.Secondly, it has to be seen as to whether the second respondent was justified in rejecting the appeal as not entertainable. This conclusion of the second respondent is incorrect, since the order passed by the Assessing Officer under Section 84 of the TNVAT Act stood merged with the order of Assessment dated 30.12.2014. Thus, in effect, the order of assessment passed against the petitioner is a modified order or rectified order passed pursuant to the exercise of powers under Section 84 of the TNVAT Act.

8.In the light of the said fact, the conclusion arrived at by the Appellate Authority that the appeal is not entertainable is incorrect. I am supported by the decision of the Hon'ble Division Bench of this Court made in the case of State of Tamil Nadu Vs Sabarigiri Industries reported in [2013] 58 VST 454 (Mad). Among other issues which were considered by the Hon'ble Division Bench, the first issue which was taken for consideration was regards the maintainability of the appeal. The facts of the said case also was more or less identical to the case on hand and while deciding the question relating to the maintainability, the Hon'ble Division Bench has held as follows: ''6.As far as the first issue on the maintainability of the appeal is concerned, in the decision reported in 39 STC 260 STATE OF TAMIL NADU V, CROMPTON ENGG. CO., this

Court held that there is a clear and a real distinction between an order allowing an application for rectification and thereby rectifying or modifying the original order of assessment and an order rejecting an application for rectification. When the rectification proceedings resulted in a positive action, which has the effect of destroying the finality of original assessment, thereby reopening the assessment order itself, then the provisions relating to appeal would lie. On the other hand, when the Assessing Officer refuses to interfere with the original order and that order is allowed to remain intact, the said order would not be amenable normally to appeal remedy. In so holding, this Court referred to the provision under Section 55

(4) of the Tamil Nadu General Sales Tax Act, 1959, inserted by Amedment Act No.31 of 1972, providing for appeal and revision remedy when an order of rectification is made, and not when the authority concerned refuses to pass an order of rectification.

7.Similar view was also taken in the decision of this Court reported in 114 STC 359 STATE OF TAMIL NADU V. SPEEDLINE AGENCIES. This Court, in paragraph 5 of the judgment, pointed out as follows:- ''Any order made by an authority declining to correct any alleged errors has the effect of leaving the original order intact.

It is only when rectification is ordered, and as consequence, one of the parties is aggreived by such modification, a remedy is required to be provided. For that prupose Section 55(4) of the Act has been introduced. That new sub-section (4) of Section 55 does not confer a right on an applicant who successfully seeks rectification, to file appeal or revision against the order declining to rectify.

If the authority which made the original order is of the view that there are in fact no errors in the order which need to be rectified, or can be rectified under Section 55 of the Act, no further proceedings can be taken by applicant, against the refusal of the authority to

make an order in favour of the person applying for rectification.''

8.In the light of the above stated decisions and in view of Section 55(4) of the Act, the first question is answered against the Revenue. Thus, as against the order of rectification passed resulting in the modification of the original order passed, the assessee has the right of appeal before the appellate forum.'' 9.In the light of the above discussion and the decision of the Hon'ble Division Bench of this Court, the impugned order calls for interference. Accordingly, these writ petitions are allowed and the impugned order is set aside and the appeal petition is restored to the file of the second respondent, who shall hear and decide the appeal on merits and in accordance with law. Consequently, connected miscellaneous petition is closed. No costs.

Consequently, connected Miscellaneous Petitions are closed.

Sd/- Asst.Registrar (CS VII) /true copy/ Sub Asst. Registrar jas To 1.The Assistant Commissioner (CT), Ranipet (Sipcot) Assessment Circle, Ranipet (Sipcot).

2.The Appellate Deputy Commissioner (CT), Commercial Taxes Buildings, Vellore.

+1 cc to Special Government Pleader(Taxes) sr2067 W.P.Nos.9503 & 9504 of 2015 and M.P.Nos.1 & 1 of 2015 gpl(co) aa08/04/2021