IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05-02-2007
CORAM:
THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN
Writ Petition No.35240 of 2005
(O.P.No.1261 of 2003)
Tvl.Ragam Polymers,
No.4, Theetharappran Street,
Chennai 5. ...Petitioner
vs.
The Commercial Tax Officer,
Ice House Assessment Circle,
Greenways Road, Chennai 28. ...Respondent
Writ Petition under Article 226 of the Constitution of
India for the issue of writ of certiorarified mandamus as
stated within.
For Petitioner : Mr.P.Radhakrishnan
For Respondents : Mr.Haja Nazirudeen,
Special Government Pleader,(T)
ORDER
The petitioner filed O.P. No.1261 of 2003 before the
Tribunal praying to quash the order of assessment passed by
the respondent in TNGST No.126868/94-95 dated 30.09.2003
consequent to the remand order of the Appellate Assistant
Commissioner (CT)-IV, Chennai passed in petitioner’s Appeal
in AP. No.311 of 1999 dated 17.07.2001 as violative of the
principles of natural justice and against the provisions of
the TNGST Act since the same has been passed without issuing
a notice and without following the directions of the
Appellate Authority issued in the petitioner’s aforesaid
Appeal which is binding on the respondent herein.
2. The facts, in short, are :
For the assessment year 1994-95 the petitioner was
originally assessed on the basis of the returns and books of
accounts in the year 1996. Later on, on the basis of the
inspection report of the Enforcement wing officials (D3
proposals) the respondent revised the order of assessment
for the assessment years 1993-94 and 1994-95 on 17.11.1998.
Against the said order of assessment for the above said
assessment years, the petitioner preferred appeals before
the Appellate Assistant Commissioner (CT IV) in Appeals
Nos.312 and 311/1999. The appellate authority, after
verification of the books of accounts and necessary
documents in support of the bill discounting, passed a
detailed common order on 17.07.2001 partly remanding and
partly dismissing the appeal and the matter stood remanded
back to the assessing officer to reconsider the issue with
certain directions. The assessing officer, who passed the
revised order, which is the subject matter of the appeal
before the appellate authority and which has been remanded
back with the specific directions, has over-stretched his
jurisdiction, and passed the impugned order. Hence, the
present OP, which is now converted to this writ petition on
being transferred to the file of this Court.
3. Heard the learned counsel on either side and
perused the materials available on record.
4. The order of the appellate authority dated
17.11.1998 on which reliance was placed read as follows :
“When the appellants had admitted that the sale
bills were issued for the purpose of discounting by
the bank only and produced documentary evidence for
discounting of the bills, it cannot be presumed that
the actual sales transactions had taken place in the
above bills, unless the department provides positive
proof for the actual sales. The goods were allegedly
supplied to two customers in Chennai only. One of
them Tvl. EID Parry ltd., have already issued a
certificate denying the transactions involved in the
sales bills issued for the purpose of bill
discounting. The appellants expressed their inability
to get a similar certificate from Tvl. Shaw Wallace
Co. Ltd., due to administrative problems. If the
department is particular to prove the transactions,
the accounts of Tvl. EID Parry Ltd., and Tvl. Shaw
Wallace Co. Ltd., could have been verified. But merely
on the basis of invoices only, the actual sales have
been presumed, without establishing the fact transfer
of property in goods had taken place for valuable
consideration.”
The appellate authority, while observing as above, concluded
as follows :
“I set aside the assessment made on the rest of the
turnover of Rs.24,31,419/- and remand back to the
assessing authority with the following directions:
a) The details that would be furnished by the appellants
in respect of entries available in slip Nos.11, 13, 21, 22,
29, 30 and 31 should be verified with reference to the
accounts of the appellants and if the transactions involved
the slips had already accounted for by the appellants, the
assessment made by the turnover of Rs.2,29,599/- along with
estimated suppression should be deleted.
b) Tvl. EID Parry Ltd., and Tvl. Shaw Wallace Co., are
companies of some repute. Therefore, the alleged sales
transactions involved in bill discounting and reflected in
the invoices recovered at the time of inspection should be
cross verified with the above buyers.
c) If the transactions reflect in the accounts of the
above buyers, such transactions should be assessed, if not
already assessed.
d) If the transactions do not reflect in the books of
accounts of the buyers, the assessment on such transactions
should be deleted.
Pursuant to the same, the impugned assessment order has been
made. On seeing the assessment order, it is manifest that
none of the directions issued by the appellate authority has
been taken note off while passing the order impugned. The
assessing officer has not taken any pain to comply with the
directions. On the other hand, he has pointed out that the
assessee has not supplied the relevant materials. It is not
as if the onus of proof on the part of the assessee vis-a-
vis the assessing officer has not been considered by the
Courts or the appellate authorities. It has been held in
several cases, and one among them is the order of the Tamil
Nadu Taxation Special Tribunal in O.P. Nos.116 and 117 of
1999 dated 11.03.1999 (M/s. Orjay Packaging products v. CTO,
Coimbatore), wherein the appellate Tribunal constituted
under Article 323-B of the Constitution, in a similar set of
facts, has opined that the action of the assessing authority
in proposing to ignore the order of the AAC and adopt his
own proposal earlier made prior to the AAC order is
thoroughly illegal. Once the order of assessment is set
aside by the AAC with certain directions, the assessing
authority is bound to obey the said order of the AAC. In
that case it is peculiar that the Tribunal called upon the
Government Advocate to collect the factual details from the
assessing officer and pursuant to that the Government
Advocate submitted written instructions from the assessing
officer. On perusal of the written instructions, the
Tribunal was of the opinion that the submission and the
written instructions support their view that the assessing
officer was trying to over-reach the order of the appellate
authority and instances have been stated.
The order impugned in the present writ petition is a
classical example of one such over-reaching attitude of the
assessing officer. When the appellate authority, whose
order is binding on the assessing officer, has given certain
directions to the assessing officer, while remanding the
matter, the assessing officer cannot over-reach the
appellate authority’s order. If at all the respondent
revenue is not satisfied with any of the observations made,
it is for them to take that part of the order on appeal
before the second appellate authority and get it expunged.
Leaving that, inspite of direction given by the appellate
authority, the assessing officer cannot stick on to his
original position and frame his assessment to his own
thinking which would otherwise destroy the binding nature
and hierarchial procedure of the statutory authorities. It
could also be seen that the assessing officer in his order
impugned has observed, as “But they have furnished the
details for Rs. Which they have claimed that only
bills were made for bank purpose, but not included in the
turnover….”. The assessing officer has not taken minimum
care to see that the blank in the order, as highlighted
above is filled up. An order of assessment, which has civil
consequence, cannot be issued in a callous manner, as in
this case. Hence, the order, which is ex facie over
reaching the order of the appellate authority has to be set
aside and the matter has to be remitted back to the
assessing officer to frame assessment by following the
directions issued by the appellate authority by its order
dated 17.07.2001. Accordingly, the impugned order is set
aside and the matter is remitted back to the assessing
officer to pass fresh order of assessment by following the
directions issued by the appellate authority by his order
dated 17.07.2001. The writ petition is ordered as above.
No costs.
mf
To
The Commercial Tax Officer,
Ice House Assessment Circle,
Greenways Road, Chennai 28.