Tvl.Sgs Detergents Pvt Ltd., v. The Assistant Commissioner

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATE: 14.06.2016

CORAM

THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.19941 of 2016 & WMP No.17208 of 2016 1 Tvl.SGS Detergents Pvt Ltd. [ PETITIONER ] Rep.by its Managing Director Mr.S.G.Sekar No.93-97 Rajivnagar Second Main Road Vanagaram Chennai-77.

Vs 1 The Assistant Commissioner (CT) Thiruverkadu Assessment Circle No.2 Alagiri Street, Thenpalani Nagar, Kolathur, Chennai-600 099.

[ RESPONDENT ] Prayer: The Writ Petition is filed under Article 226 of the Constitution of India, seeking for a Writ of certiorarified mandamus to call for the records on the files of the respondent proceeding in CST No/796079/ 2013-14 dated 29.03.2016 and quash the same as being invalid and violated the principles of natural justice and direct the respondent to grant sufficient time before completion of assessment as per the petitioner's request dated 08.06.2016.

For Petitioner : Mr.D.Vijayakumar For Respondent : Mr.Manokaran Sundaram Additional Government Pleader

O R D E R

Heard Mr.D.Vijayakumar, learned Counsel appearing for the petitioner and Mr.Manokaran Sundaram, learned Additional Government Pleader accepting notice on behalf of the respondent and with the consent of learned counsel appearing on either side, this writ petition is taken up for final disposal.

2.The petitioner is a manufacturer and dealer in Detergent cakes, Toilet Soaps, Cleaning Powers etc., and they are registered under the Tamil Nadu Value Added Tax, 2006 (TNVAT Act). The petitioner reported a total taxable turnover of Rs.2,26,89,479/- through their monthly returns for the assessment year 2013-14 under the provisions of the Central Sales Tax Act, 1956 (CST Act). The respondent issued a notice dated 29.12.2015, stating that the petitioner have effected interstate sale of detergent items to registered dealers to a tune of Rs.2,26,89,479.00 and claimed concession levy at 2%. In support of their claim, they have not furnished any 'C' Form for the entire value. Hence, the concern turnover is proposed to be assessed at higher rate of 14.

5%, besides proposing to reverse the input tax credit, as per the provisions of section 19(5)(c) of TNVAT Act, 2006, on the corresponding purchase value, being the sales is under section 8(2) of CST Act, in separate proceedings under TNVAT Act, 2006. It was further stated that the petitioner have not filed the monthly return for the months of April 2013. Even on verifying the efiling, it was not found. Hence, the turnover is estimated at the proportionate basis, which is worked out to Rs.20,62,680.00. On the basis of the best judgment as per the provisions of section 25 of the Act. Besides, the proportionate is under penalty at 150% tax due thereon. It is therefore proposed to assess the estimated turnover of Rs.20,62,680 at 14.5%.

Further in the notice it was proposed to verse the Input Tax Credit under section 19(2)(v), 19(4) and 19(5)(c), wherever necessary. The petitioner was granted 15 days time to submit their objections.

3.The petitioner by their letter dated 18.01.2016, informed the respondent stating that they are submitting some of the 'C' Forms for the period 2013-14, collected for the value of Rs.1,48,32,481/- and the balance 'C' Forms are yet to be collected from some of the parties. Therefore, they requested for one month time to submit the 'C' Forms. Thereafter, by another letter dated 24.03.2016, the petitioner after setting down the factual details, requested the respondent to take the Books of Accounts for framing an assessment and also requested to issue summons to the petitioner to produce the Books of Accounts.

4.It is not disputed that the respondent has received both the letters given by the petitioner i.e. Dated 18.01.2016 and 24.03.2016. However, the respondent proceeded to reject the petitioner's contentions and passed an order under section 22(2) of the TNVAT Act read with section 9(2) of the CST Act. 5.The power under section 22(2) of the Act could be exercised by the Assessing Authority shall accept the returns for the year submitted by the dealer and if the returns are in

the prescribed form and accompanied with the prescribed documents and proof of payment of tax, the provision states that every such dealer shall be deemed to have been assessed for the year on the 31st day of October of the succeeding year. Thus, section 22(2) of the Act speaks about the deemed assessment. However, in the instant case, the impugned order is not an order of deemed assessment, but in fact an order under section 22(4) of the TNVAT Act. This Court is inclined to make such an observation that the Assessing Officer, found the return submitted by the petitioner/dealer as incorrect and not accompanied with the documents prescribed, etc. and therefore, while exercising the power, necessarily the respondent has to frame the assessment under section 22(4) of the Act. If that be the case, then an opportunity of being heard should have been granted to the petitioner in terms of the proviso under section 22(4) of the Act. Furthermore, the respondent did not grant any opportunity to the petitioner to rectify the defect by producing the 'C' Forms.

In fact, the petitioner submitted a representation on 08.06.2016, agreeing to rectify the defective 'C' forms. It is alleged that this representation was refused to be received by the respondent and therefore, the petitioner had sent the same by Registered Post on 08.06.2016. In the light of the above said legal position, the impugned order of assessment has to be necessarily interfered with. 6.Accordingly, the Writ Petition is allowed and the impugned order of assessment dated 29.03.2016, is set aside and the matter is remitted to the respondent for fresh consideration, who shall afford an opportunity of personal hearing to the petitioner to enable them to produce the 'C 'Form declaration duly corrected by giving them a reasonable time to do so, which shall be not less then fifteen days. Thereafter, the respondent shall frame the assessment in accordance with law. No costs. Consequently, connected Miscellaneous Petition is closed.

-s/d- Assistant Registrar True Copy Sub-Assistant Registrar Rpa

To 1 The Assistant Commissioner (CT) Thiruverkadu Assessment Circle No.2 Alagiri Street, Thenpalani Nagar, Kolathur, Chennai-600 099.

+1 cc to Mr.D.Vijayakumar Advocate sr.31843 +1 cc to Special Government Pleader sr.32015 W.P.No.19941 of 2016 svl(co) aa24/06/2016