Madras High Court
Sri Ayyan Textile Mills (P) Ltd vs The Assistant Commissioner (St) on 16 June, 2022
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 16.06.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
W.A. Nos. 1274, 1275, 1276, 1277, 1278 and 1280 of 2022
and
CMP Nos. 8033, 8036, 8038, 8039, 8042, 8043,
8044, 8047, 8048, 8049, 8050 of 2022
---
Sri Ayyan Textile Mills (P) Ltd.,
represented by its Director
J. Kulasekaran
S.F.No.414, Mettupalayam Road,
Narasimmanaickenpalayam,
Coimbatore 641 031 ... Appellant in all the appeals
Versus
The Assistant Commissioner (ST)
Thudiyalur Assessment Circle
Coimbatore. ... Respondent in all appeals
Appeals filed under Clause 15 of the Letters Patent against the common
order dated 02.12.2021 passed by the learned Single Judge in W.P. Nos.
10819, 10824, 10825, 10826, 10829 and 10833 of 2019.
For Appellant : Mr. N. Inbarajan
in all the appeals
For Respondent : Mr. Richardson Wilson
Additional Government Pleader
in all the appeals
https://www.mhc.tn.gov.in/judis
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
COMMON JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.)
Heard both sides and perused the materials available on record.
2.Challenging the assessment orders dated 31.12.2018 passed by the
respondent relating to the assessment years 2011-12 to 2016-17, the appellant
/ assessee preferred the writ petitions viz., W.P. Nos. 10819, 10824, 10825,
10826, 10829 and 10833 of 2019, contending that Hank Yarn is an exempted
commodity falling under serial no.44 part B of the IV Schedule of the TNVAT
Act, 2006 and hence, the appellant claimed exemption for the sale of hank
yarn both under the TNVAT Act 2006 as well as under the CST Act. However,
the respondent, based on the inspection of the Enforcement Wing Officials,
rejected the claim of the appellant on the sales of hank yarn in respect of inter-
state sales, stock transfer and outside the State sales and passed the assessment
orders, on the ground that the appellant did not file their objections to the
notices issued by the respondent.
3.By a common order dated 02.12.2021, the learned Judge disposed of
the aforesaid writ petitions filed by the appellant /assessee, in the following
terms:
https://www.mhc.tn.gov.in/judis
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
“14. However, considering the fact that the petitioner is
facing huge demand of tax and penalty, this case is remitted back to
the respondent to re-consider the issue subject to the petitioner
depositing a 25% of the demand in the respective impugned
Assessment Orders as a condition for the case to be heard. The
amount shall be deposited by the petitioner within a period of three
months from the date of receipt of a copy of this order.
15. Subject to the petitioner complying the above direction,
the impugned Assessment Orders will stand quashed. In case the
petitioner fails to remit the amount, it will be deemed that these Writ
Petitions have been dismissed. In case the petitioner deposits the
amount, the petitioner will also at liberty to file reply to the notices
within a period of two (2) weeks from the date of payment of
aforesaid 25% of the demand.
16. If such reply was filed by the petitioner within the time
limit, the respondent shall take up the case of the petitioner and
dispose the same on merits and in accordance with law within a
period of three (3) months thereafter.
17. These Writ Petitions are disposed with the above
directions. No costs. Consequently, connected Miscellaneous
Petitions are closed.”
Aggrieved over the order of the learned Judge, the appellant / assessee is
before this court with these intra-court appeals.
4.The learned counsel for the appellant submitted that the respondent,
without providing reasonable opportunity of being heard to the appellant /
assessee, has passed the assessment orders dated 31.12.2018, relating to the
assessment years in question, which are arbitrary, illegal and in violation of the
principles of natural justice and hence, the same are liable to be set aside.
When the same was put to challenge before the writ court, the learned Judge
quashed the same, however, imposed a condition to deposit 25% of the
demand, for non-filing of reply by the appellant / assessee to the notices issued
https://www.mhc.tn.gov.in/judis
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
by the respondent, which is totally unwarranted. According to the learned
counsel, when the entire assessment proceedings of the respondent was
quashed, the question of pre-condition to deposit any part of the demand, does
not arise. Therefore, the learned counsel sought to allow these appeals by
quashing the order of the learned Judge.
5.Per contra, the learned Additional Government Pleader (Taxes)
appearing for the respondent submitted that the respondent issued show cause
notices dated 22.06.2018 proposing to re-assess the turnover reported by the
appellant / assessee by granting 15 days time for filing their reply. However,
the appellant did not file their objections. Therefore, the respondent has no
other option except to pass the assessment orders on 31.12.2018, which cannot
be faulted with. The learned counsel further submitted that though the
appellant was granted sufficient time, they failed to utilise the same in proper
manner and hence, they cannot now state that no personal hearing was
provided to them before passing the assessment orders. Taking note of the
same, the learned Judge rightly imposed a pre-condition of deposit of 25% on
the appellant, which does not call for any interference at the hands of this
court.
https://www.mhc.tn.gov.in/judis
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
6.After hearing both sides and upon perusal of the documents enclosed
in the typed set of papers, we concur with the order of the learned Judge in
setting aside the assessment orders passed by the respondent, on the ground of
violation of the principles of natural justice, as it is an admitted fact that the
appellant / assessee did not file their objections to the notices issued by the
respondent and they were not provided any opportunity of personal hearing.
7.At the same time, the condition of deposit of 25% imposed on the
appellant / assessee, considering the facts and circumstances of the case, is
unwarranted, in the opinion of this court. In similar circumstances, a
co-ordinate Bench of this court in Havea Handles & Components Pvt. Ltd v.
the Assistant Commissioner (CT) (FAC), Royapettah II Assessment Circle,
Chennai, by judgment dated 04.07.2014 in WA Nos.867 to 869 of 2014, has
set aside the condition of pre-deposit to enquire into the matter, as
unsustainable and the relevant paragraph of the same is profitably extracted
below:
"6.It has to be pointed out, at this stage, that,once it has
been found that the orders impugned in the writ petitions are
unsustainable on account of violation of principles of natural
justice, it is wholly unnecessary to impose any condition while
remitting the matter for fresh adjudication and in the considered
opinion of this court, the direction given to the appellant / writ
petitioner to deposit 10% of the tax amount as claimed in the
demand notice, as a condition precedent to enquire into the
matter, is unsustainable and the said portion of the order is
https://www.mhc.tn.gov.in/judis liable to be set aside."
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
8.In such view of the matter, the order of the learned Judge dated
02.12.2021 passed in the writ petitions, is modified to that extent. The
appellant shall file their reply/objections to the notices dated 22.06.2018
within a period of two weeks from the date of receipt of a copy of this
judgment. Thereafter, the respondent shall consider the matter and pass orders
afresh, on merits and in accordance with law, after affording due opportunity
of personal hearing to the appellant, within a period of eight (8) weeks.
9.All the appeals stand disposed of in the above terms. No costs.
Consequently, connected miscellaneous petitions are closed.
[R.M.D,J.] [M.S.Q., J.]
16.06.2022
msr/rsh
Index : Yes / No
To
The Assistant Commissioner (ST)
Thudiyalur Assessment Circle
Coimbatore.
https://www.mhc.tn.gov.in/judis
W.A.Nos.1274, 1275, 1276, 1277, 1278 & 1280 of 2022
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
msr/rsh
W.A. Nos. 1274, 1275, 1276, 1277
1278 and 1280 of 2022
16.06.2022
https://www.mhc.tn.gov.in/judis
