Madras High Court

M/S. Sridhar & Co vs The State Tax Officer on 1 September, 2021

                                                                    W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                     DATED: 01.09.2021

                                                           CORAM

                                    THE HONOURABLE MR. JUSTICE M. SUNDAR

                                           W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

                                                              &

                        W.M.P. Nos. 2267, 2268, 2271, 2272, 2273, 2275, 2277 & 2280 of 2019

                     M/s. Sridhar & Co,
                     rep. by its Proprietor U. Sridhar,
                     No.20-D, Bye pass Road,
                     Near Samiyar Madam,
                     Ambur – 635 802,
                     Vellore District.                               ..Petitioner in all the writ
                                                                     petitions

                                                              Vs.

                     The State Tax Officer,
                     Ambur Assessment Circle,
                     Ambur, Vellore District.                        ..Respondent in all the

writ petitions

Prayer: Petitions under Article 226 of the Constitution of India praying

for issue of a Writ of Certiorari to call for the records on the file of the

respondent in his impugned proceedings made in TIN Nos.

33754261568/2012-13, 33754261568/2014-15, 33754261568/2013-14 &

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

33754261568/2015-16 dated 19.11.2018, 04.12.2018, 04.12.2018 and

04.12.2018 respectively and to quash the same as illegal and contrary to the

scheme of the Act.


                                    For Petitioner in all
                                    the writ petitions ::      Mr.S. Rajasekar

                                    For Respondent in

all the writ petitions:: Ms.Amirta Dinakaran, Govt. Counsel

COMMON ORDER

This common order will dispose of the captioned four writ petitions

and writ miscellaneous petitions therein.

2. Mr.S. Rajasekar, learned counsel for writ petitioner in all the

four writ petitions is before this Virtual Court.

3. A perusal of the case file placed before this Court brings to

light that the captioned writ petitions were filed more than 2 years and 8

months ago, to be precise on 18.01.2019, but have been in the Admission

Board itself for over 2 ½ years now. Learned counsel for writ petitioner has

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

taken as many as five adjournments in as many listings in this span of over

2 ½ years.

4. Learned counsel expresses regret for the repeated adjournments

and submits that it was only because he was in poor health. Adjournment

on the ground of poor health of a counsel is clearly unexceptionable and

there can be no two ways about it,but, there are two counsel on record and

the other counsel could have represented and in any event, alternate

arrangements could have been made as it is a period of 2 years and 8

months.

5. This Court proceeds with this matter (after making the

aforementioned observation) treating the captioned matter to one in the

Admission Board.

6. The above mentioned observation shall not be taken as any

remark about the learned counsel for writ petitioner, but it has been set out

only for the limited purpose of ensuring that such scenarios do not recur and

that such occurrences are avoided in the days to come.

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

7. Captioned four writ petitions are identical, the sole

distinguishing feature being the assessment years only. Captioned writ

petitions arise under 'Tamil Value Added Tax Act, 2006' (which shall

herienafter be referred to as 'TNVAT Act' for the sake of brevity,

convenience and clarity) and orders dated 19.11.2018, 04.12.2018,

04.12.2018 and 04.12.2018 bearing reference TIN No. 33754261568/2012-

2013, TIN No. 33754261568/2014-2015, TIN No. 33754261568/2013-

2014 & TIN No. 33754261568/2015-2016 respectively (hereinafter referred

to as 'impugned orders' in plural, 'impugned order' in singular for the sake of

convenience and clarity) have been called in question in the captioned

aforesaid writ petitions. This Court is informed that impugned orders have

been made under Section 27 of TNVAT Act post deemed assessment under

Section 22(2) of TNVAT Act.

8. Notwithstanding very many averments in the writ affidavit and

very many grounds, learned counsel submitted that the sheet anchor

submission would be infraction of Narasus principle, i.e, the principle laid

down by this Court in Narasus Roller Flour Mills V. Commercial Tax

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

Officer (Enforcement Wing), Sankagiri reported in [2015] 81 VST 560

(Mad). Narasus principle is when there is an assessment qua escaped turn

over and wrong availment of input tax credit (ITC) under Section 27 of

TNVAT Act (post deemed assessment under Section 22(2) of TNVAT Act),

the Assessing Officer should independently apply his mind and should not

be guided solely by proposal made by the Enforcement Authorities or by the

revision proposed by the Enforcement Authorities.

9. Ms. Amirta Dinakaran, learned State Counsel, who is before

this Virtual Court, accepts notice on behalf of the respondent in all the four

writ petitions. With the consent of learned counsel on both sides, the main

writ petitions were taken up and the same are now disposed of, as the writ

petitions turn on a very acute legal curve and narrow compass.

10. A careful perusal of the impugned orders bring to light that the

impugned orders, after setting out the deemed assessment under Section

22(2) of TNVAT Act, go to show that the business place of writ petitioner

was inspected by Enforcement Officers on certain dates and they noticed

certain defects. The defects noticed by Enforcement Officers have been

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

adumbrated. After adumbration of defects noticed by the Enforcement

Officers, the impugned order merely says that the turnover declared by the

writ petitioner is incorrect and simply puts in place the proposed revision

i.e, the revision proposed by the Enforcement Wing. Thereafter, the

impugned order also makes an equal time addition by way of penalty under

Section 27(3) of TNVAT Act.

11. Learned counsel for writ petitioner pointed out that in response

to the opportunity given to writ petitioner, prior to the impugned orders, the

writ petitioner had requested for a personal hearing for two purposes i.e,

(a) to explain the details and

(b) to produce documents in support of their claim.

12. Learned counsel for writ petitioner submitted that if a personal

hearing had been granted, the writ petitioner would have been able to

produce documents in support of their claim, but, this Court does not

propose to go into that aspect of the order as personal hearing is not

statutorily imperative for proceedings under Section 27 of TNVAT Act.

This Court held so in State Bank of India Officers' Association(CC) -

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

SBIOA V. Assistant Commissioner (ST), Muthialpet Assessment Circle,

No.199, 2nd Floor, Thambu Chetty Street, Chennai, in W.P. No. 22634 of

2019 and the same was confirmed by a Honourable Division Bench vide

judgment dated 06.12.2019 in W.A. No. 4073 of 2019.

13. However, the argument predicated on infraction of Narasus

principle does weigh with this Court as perusal of impugned orders make it

clear that the respondent has merely gone by the revised proposal suggested

by the Enforcement Wing without independently analyzing the material

before it.

14. Before this Court proceeds to set out the operative portion of

this order, it is necessary to make it clear that the question as to whether the

Assessing Officer should give an opportunity to produce supporting

documents, is at the discretion of the respondent. The following order is

passed:

(a) The impugned orders dated 19.11.2018, 04.12.2018,

04.12.2018 and 04.12.2018 bearing reference TIN No.

33754261568/2012-2013, TIN No. 33754261568/2014-2015,

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

TIN No. 33754261568/2013-2014 & TIN No.

33754261568/2015-2016 respectively are set aside.

(b) The impugned orders are set aside solely for the

prupose of enabling the respondent to redo the revisional

assessment by following Narasus principle i.e, independent

application of mind by the respondent qua the proposal given

by the Enforcement Wing, in other words, without blindly and

mechanically accepting the revised proposal made by the

Enforcement Wing.

(c) Before redoing the assessment, it is open to the

respondent to call for documents in support of writ petitioner's

request in response to the pre-revisional assessment notice.

(d) Respondent shall do this denovo exercise in accordance

with the directives adumbrated in Circular No.3/2019

Q1/39643/2018 issued by the Additional Chief

Secretary/Commissioner of State Tax, Office of the

Commissioner of State Tax, Chepauk, Chennai - 5 dated

18.01.2019 and Narasus principle (already alluded to) laid

down by this Court in [2015] 81 VST 560 (Mad).

https://www.mhc.tn.gov.in/judis/ W.P. Nos. 2007, 2013, 2020 & 2023 of 2019

(e) The aforementioned denovo exercise shall be

commenced forthwith and completed by the respondent as

expeditiously as business of his office would permit and in

any event, within eight weeks from today, i.e, on or before

27.10.2021.

(f) Revised assessment orders shall be served on the writ

petitioner under due acknowledgement by the respondent.

15. Captioned writ petitions are disposed of with the aforesaid

directives. Consequently, writ miscellaneous petitions are closed. There

shall be no order as to costs.

01.09.2021