M/S. Aakash Automobiles Pvt. v. The Assistant Commissioner

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 24.07.2017

CORAM

THE HON'BLE Mr. JUSTICE T.S.SIVAGNANAM W.P.No.18789 of 2017 and W.M.P.Nos.20317 & 20318 of 2017 M/s.Aakash Automobiles Pvt.Ltd., Rep. by its Director S.Rajavel ... Petitioner Vs.

The Assistant Commissioner (CT), Villupuram-I Circle, Villupuram, Villupuram District.

... Respondent Prayer : Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records on the file of the respondent in his impugned proceedings made in TIN:33214682069/2011-12 dated 15.02.2017 and quash the same.

For Petitioner : Mrs.R.Hemalatha For Respondent : Mr.K.Venkatesh, GA (Taxes)

O R D E R

Heard Mrs.R.Hemalatha, learned counsel appearing for the petitioner and Mr.K.Venkatesh, learned Government Advocate, accepting notice on behalf of the respondent. With the consent on either side, the writ petition is taken up for disposal.

2. The petitioner, which is a registered dealer on the file of the respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006, is before this Court challenging the order of assessment.

3. The respondent issued a notice dated 29.11.2016, which was pursuant to the inspection conducted by a group of Enforcement Wing Officers on 17.12.2015, 18.12.2015, 19.12.2015, 30.12.2015 and 05.1.2016, pointing out that on verification of Annexure-I filed by them with their monthly returns and when compared with the purchase details taken from other end dealers Annexure-II obtained from the Commercial Tax Department website for the assessment year 2011-12, it was found that certain purchases were not accounted for in the monthly returns filed by the petitioner for the relevant assessment year. Therefore, the respondent proposed to treat them as purchase omission and

proposed to demand tax and levy penalty and also proposed to levy equal time of addition towards probable omission.

4. The petitioner submitted their objection dated 29.12.2016 stating during the inspection, the officials informed that there was a purchase suppression for the relevant financial year and the petitioner informed the officers that they do not have any business transaction with the seven dealers, whose names were mentioned in the show cause notice dated 29.11.2016, but on the request of the Enforcement Wing Officers, they have paid the amount under protest and in the statement recorded from them, they clearly stated that they have no business activities with those seven dealers.

5. Therefore, the petitioner stated that the demand raised by the respondent as proposed in the notice dated 29.11.2016 is not sustainable. Further, it was submitted that for the mistakes done by the other dealers by quoting their tax payer identification number, they are not liable to pay any tax and penalty and the proposal of additions of turnover, taxes, and penalty shall be dropped.

6. The respondent afforded an opportunity of personal hearing and after referring to the objections given by the petitioner, confirmed the proposal in the notice by stating that in terms of Section 17(1) of the said Act, the burden of proving that any transaction or any turn over of a dealer is not liable to tax, shall lie on such a dealer and therefore, having not proved the same, their objections were rejected.

7. However, one important factor, which appears to have been lost sight of by the Assessing Officer is that the present assessment is a revision of assessment, as the petitioner has been deemed to have assessed under Section 22(2) of the said Act for the relevant assessment year. Therefore, if it is revision of assessment under Section 27 of the said Act, the Assessing Officer, within the time stipulated under Section 27(1) of the said Act, may re-assess the tax due, after making such enquiry, as it may consider the necessary. Apart from that, an opportunity has to be given to the dealer to show cause against the order of proposing revision.

8. Therefore, when the revision has been done under Section 27 of the said Act, then it is incumbent upon the Assessing Officer to consider the objections raised by the petitioner and cannot be merely guided by the report of the Enforcement Wing Officers. That apart, the present revision of assessment is based upon the information culled out from the Commercial Tax Department Website.

9. This court had considered as to how such re-assessments have to be done, when re-assessment are proposed based on the web page report and in the case of M/s.JKM Graphics Solutions Pvt Ltd and others Vs. Commercial Tax Officer, Vepery Assessment Circle and others reported in 2017(3) TMI 536, this Court had elaborately dealt with the issue and laid down certain guidelines for the Assessing Officers to follow. The sum and substance of the guidelines laid down is to conduct an enquiry wherein the other end dealer should also be present, for which purpose, the Assessing Officer is empowered to call for the details from the Assessing Officers of the other end dealers.

10. In the instant case, the petitioner has taken a specific stand, they had no business transaction with those seven dealers. Therefore, the petitioner cannot be called upon to prove the negative and essentially, the Assessing Officer should embark upon an enquiry and then come to a conclusion as to which of the statements are correct namely the stand taken by the petitioner or the details mentioned in Annexure II of the other end dealer. Having not undertaken such exercise, the impugned order calls for interference.

11. Accordingly, the writ petition is allowed and the impugned order is set aside. The matter is remanded to the respondent for a fresh consideration, who shall issue notice not only to the petitioner, but also to the other end dealers through the respective Assessing Officers, conduct an enquiry, thereafter re-do the assessment in accordance with law. No costs. Consequently, the above WMPs are closed. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar gsk To The Assistant Commissioner (CT), Villupuram-I Circle, Villupuram, Villupuram District.

+1 cc to M/s.R.Hemalatha Advocate sr 51881 +1 cc to the Government Pleader (Taxes) sr 52482 W.P.No.18789 of 2017 cp(co) aa18/08/2017