Madras High Court
M/S.Agathyaz Traders vs The State Tax Officer on 24 August, 2023
W.P.(MD).Nos.12644 to 12646 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 24.08.2023
CORAM
THE HONOURABLE MRS.JUSTICE S.SRIMATHY
W.P.(MD).Nos.12644 to 12646 of 2022
and
W.M.P.(MD)Nos.8959, 8960 and 8962 of 2022
M/s.Agathyaz Traders,
represented by its Proprietrix G.Geetha,
No.75, Trichy Main Road,
Thirumanilaiyur, Karur-639 002. ... Petitioner in all cases
Vs.
The State Tax Officer,
Survey Unit-1,
Office of the Assistant Commissioner (ST)
(Investigation) Intelligence Wing,
Erode Division, Erode. ... Respondent in all cases
PRAYER in W.P.(MD)No.12644 of 2022 : Writ Petition filed under Article
226 of the Constitution of India, praying this Court to issue a Writ of
Certiorari, to call for the records pertaining to the impugned order passed by
the respondent in GSTIN:33AJEPG0595M1Z4/2017-18, dated 30.09.2020 and
to quash the same.
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W.P.(MD).Nos.12644 to 12646 of 2022
PRAYER in W.P.(MD)No.12645 of 2022 : Writ Petition filed under Article
226 of the Constitution of India, praying this Court to issue a Writ of
Certiorari, to call for the records pertaining to the impugned order passed by
the respondent in GSTIN:33AJEPG0595M1Z4/2018-19, dated 30.09.2020 and
to quash the same.
PRAYER in W.P.(MD)No.12646 of 2022 : Writ Petition filed under Article
226 of the Constitution of India, praying this Court to issue a Writ of
Certiorari, to call for the records pertaining to the impugned order passed by
the respondent in GSTIN:33AJEPG0595M1Z4/2019-20, dated 30.09.2020 and
to quash the same.
In all cases:
For Petitioner : Mr.T.Bashyam
For Respondents : Mr.M.Ramesh
Government Advocate
*****
COMMON ORDER
These writ petitions are filed by M/s.Agathyaz Traders challenging
the impugned assessment orders dated 30.09.2020 for the Assessment years
2017-2018, 2018-2019 and 2019-2020.
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W.P.(MD).Nos.12644 to 12646 of 2022
2.The petitioner was a trader engaged in trading of timber logs and
wooden saws as well as engaged in manufacturing of door and window frames
and was an assessee under GST, but closed the business in the year 2021. The
petitioner has filed the return for the assessment year 2017-2018, 2018-2019
and 2019-2020. The contention of the petitioner is that the respondent has
conducted inspection of the petitioner's premises and has taken away all the
documents. Based on the inspection, a report was submitted by the Intelligence
Wing to the Assessing Officer. The Assessing Officer in turn had issued a show
cause notice, dated 02.07.2020 for which the petitioner submitted reply dated
22.09.2020, wherein the petitioner has narrated the defects in the show cause
notice as well as the proposed assessment. And the summarization of the entire
objection is that:
“(1) The petitioner was illegally forced to submit reply in 3 Days
not obeying the GST council relaxation.
(2) Still date / permission for seeing or copying Relied upon
documents not given, you cannot pass orders based on evidence
in your possession without disclosing and giving an opportunity
to contest the evidence.
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W.P.(MD).Nos.12644 to 12646 of 2022
(3) You have decided incorrectly that there is no vehicle when the
Vahan App is showing the vehicle
Hence, we request you to give us a proper and full opportunity to
explain the other mistakes in the Show cause Notice.”
The petitioner has specifically stated that the entire documents are with the
Vigilance Department and hence, the petitioner is not in a position to submit his
explanation without any documents. Moreover, the petitioner had sought
opportunity to peruse the documents and submit their objections, but the
respondents have not granted adequate opportunity to the petitioner. The
petitioner vehemently objected to the assessment proceedings since the
assessment is passed based on the inspection report and there is no independent
application of mind.
3.The learned Counsel appearing for the petitioner relied on the
order passed in the case of Madras Granites (P) Ltd. vs Commercial Tax
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W.P.(MD).Nos.12644 to 12646 of 2022
Officer, dated 30.10.2002 reported in (2006) 146 STC 642 (Mad) wherein it is
held that the Assessing Officer cannot rely on the report without independently
analyzing the issue and cannot pass an order. The relevant portion of the order
is extracted hereunder:
“4. No doubt, the assessing officer issued pre-assessment notice
including the notice for levy of penalty calling for objections from the
dealer and after receiving reply from the dealer, completed the
assessment on the basis of D-3 proposal forwarded by the Assistant
Commissioner (CT), Enforcement. We find from the records that in D-3
proposal, the Deputy Commissioner (CT), Enforcement, Salem, has not
only determined the surplus turnover, but also determined the quantum
of penalty that might be imposed on the dealer. Therefore, when the
higher officer, viz., the Assistant Commissioner (CT), Enforcement, has
directed the assessing officer to complete the assessment on the basis of
the proposal in D-3 form, we find that the assessing officer, who is lower
in rank in the hierarchy of officers, is bound by the said direction, and
the records also show that the assessing officer has not independently
applied his mind, but adopted the sales turnover as found in D-3
proposal and also levied the penalty in the manner indicated in D-3
proposal. It is well-settled that the assessing officer is a quasi-judicial
authority and in exercising his quasi-judicial function of completing
the assessment, he is not bound by the instructions or directions of the
higher authorities. We find that in both the matters the assessing
officer has acted on the basis of the directions of his higher authority
in completing the assessments. We hold that the assessments are not
sustainable in law. Accordingly, the orders of assessment in both the
matters are liable to be quashed and consequently, the orders of the
Special Tribunal confirming the orders of assessment are also liable to
be quashed. However, it is open to the assessing officer, viz., the first
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W.P.(MD).Nos.12644 to 12646 of 2022
respondent herein, to pass orders of assessment afresh in accordance
with law, after giving an opportunity to the petitioner. Both the writ
petitions stand allowed. No costs. Connected W.P.M.Ps. are closed.”
4. The Learned Counsel appearing for the petitioner further
submitted that the authorities had taken away the documents during inspection
and without the returning the documents and without serving the copies of the
documents, the respondents had directed the petitioner to submit objections to
the show cause notice, thereby the respondents have directed to do the
impossible and relied on the order passed in the case of G.Thangavel Nadar
Vs. The Deputy Commercial Tax Officer, dated 06.12.1962 reported in [1963]
14 STC 420 (Mad) wherein it is held as under:
“4. It is clear that to ask an assessee to submit a return and at
the same time taking away his books of account is to demand the
impossible. It is unthinkable that the Deputy Commercial Tax Officer
could proceed to penalize a person for not doing something, the doing of
it being prevented by the officer's own action. In this view of the matter
there is no doubt whatsoever that there has been a gross violation of the
principles of natural justice. That the assessee failed to submit return for
earlier years or failed to register himself cannot give jurisdiction to the
assessing authority to impose a penalty for the assessment year in
question.”
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W.P.(MD).Nos.12644 to 12646 of 2022
5. The learned Government Advocate appearing for the respondent
relied on the common counter affidavit and submitted that the petitioner has not
responded to any notice properly. The petitioner was granted opportunity on
03.09.2020, 07.09.2020, 16.09.2020 and 22.09.2020. Since the petitioner has
not responded to any of the notice, the respondents were left with no option
than to pass order for the assessment years 2017-18, 2018-19 and 2019-20 and
the same was completed on 30.09.2020. The respondent has taken all the
relevant provisions as well as notices and circulars into consideration and
finally has passed the impugned orders. Therefore, the petitioner cannot find
fault with it. Moreover, the petitioner has statutory remedy of filing an appeal.
Without filing an appeal, the petitioner has come forward to file these writ
petitions. Hence, the respondent prayed to dismiss the writ petitions.
6. After hearing the rival submissions of both sides, this Court is of
the considered opinion that after inspection, the respondent has taken away the
documents. When the respondent is in possession of the documents, then
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W.P.(MD).Nos.12644 to 12646 of 2022
respondent cannot expect the petitioner to make a submission without referring
to the documents. In fact, the petitioner has specifically sought to refer the
documents. The respondents have not supplied the copy of the documents, in
fact the respondents have not even allowed the petitioner to see the documents.
7. Therefore, this Court is of the considered opinion that the
respondents have not circulated the documents, thereby the respondents have
not granted effective opportunity to the petitioner and violated the principles of
natural justice. The opportunity includes supply of documents as well. When
that was not done, the petitioner is entitled to relief. As rightly pointed out by
the learned Counsel appearing for the petitioner, the judgment referred supra
had held that the respondent is demanding the assessee to do the impossible.
Therefore, the impugned assessment orders are liable to be quashed and
accordingly quashed.
8. The respondent is directed to supply all the relevant documents
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W.P.(MD).Nos.12644 to 12646 of 2022
which the respondent is relying as well as the respondent is directed to produce
all the documents which the petitioner inclines to rely and thereafter, pass
orders.
9. Since the revenue cannot be at loss, therefore the petitioner is
directed to pay Rs.2 Lakhs/- for each assessment order. The above said exercise
shall be completed within a period of three months from the date of receipt of a
copy of this order.
10. With the above said observation, the writ petitions are allowed.
No costs. Consequently, connected miscellaneous petitions are closed.
24.08.2023
NCC : Yes/No
Index : Yes / No
Internet : Yes/ No
Tmg
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W.P.(MD).Nos.12644 to 12646 of 2022
To
The State Tax Officer,
Survey Unit-1,
Office of the Assistant Commissioner (ST)
(Investigation) Intelligence Wing,
Erode Division, Erode.
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W.P.(MD).Nos.12644 to 12646 of 2022
S.SRIMATHY, J.
Tmg
W.P.(MD).Nos.12644 to 12646 of 2022
24.08.2023
https://www.mhc.tn.gov.in/judis
