2016 (3) TMI 1188 - HC - VAT and Sales Tax

Court sets aside assessment orders for non-compliance, issues guidelines for timely implementation.

The court set aside the impugned assessment orders due to non-compliance with appellate authority directions, significant delays, violation of natural ... Maintainability of petition - after a long lapse of five years, the present impugned orders dated 25.5.2015 have been passed, confirming the original assessment of tax and penalty on the very same grounds and according to the petitioners, it is nothing but non-application of mind on the part of the respondents - Held that: - the first respondent has passed the impugned orders without following the directions issued by this Court as well as the direction issued by the second respondent on two different occasions and at the same time, the first respondent did not even consider the petitioners' reply - the delay in considering the claim of the petitioners, played a pivotal role in the case on hand and thus, the orders impugned herein, have no legs to stand and therefore, they are liable to be interfered with on this ground too - the impugned orders are liable to be set aside - matters are remanded to the authorities for consideration afresh and the respondents are directed to consider each and every aspect on the basis of the materials available - appeal allowed by way of remand. Issues Involved:1. Non-compliance with appellate authority's directions.2. Delay in assessment and implementation of orders.3. Violation of principles of natural justice.4. Legality of the assessment orders.Issue-wise Detailed Analysis:1. Non-compliance with Appellate Authority's Directions:The petitioners, dealers in edible oils, challenged the assessment orders for the years 1997-1998 and 1998-1999. The appellate authority had previously set aside the original assessment orders and directed a fresh assessment with specific instructions. However, the first respondent failed to adhere to these directions, issuing a notice on 31.12.2007 without implementing the appellate authority's instructions. This non-compliance continued despite multiple reminders and representations from the petitioners, ultimately leading to the impugned orders dated 25.05.2015, which again ignored the appellate authority's directions.2. Delay in Assessment and Implementation of Orders:The court noted significant delays in the assessment process. After the appellate authority's order in 2007, the first respondent took four years to issue another notice in 2011, and then another five years to pass the impugned orders in 2015. The court emphasized that such delays are detrimental to justice, causing unnecessary hardship to the petitioners and potential revenue loss to the government. The court stressed the importance of timely action by assessing officers to avoid such issues.3. Violation of Principles of Natural Justice:The petitioners argued that they were not provided with necessary documents and details to defend their case, despite repeated requests. The court found merit in this argument, noting that the failure to furnish these documents constituted a violation of the principles of natural justice. The court highlighted that the respondents did not deny the petitioners' allegations regarding the non-provision of documents, further supporting the claim of a violation of natural justice.4. Legality of the Assessment Orders:The petitioners contended that the impugned orders were contrary to the principles laid down by the Supreme Court and the High Court in previous judgments. They argued that the orders were based on the same grounds as the original assessment, which had already been set aside by the appellate authority. The court agreed, noting that the first respondent's failure to follow the appellate authority's directions and the significant delays indicated a lack of application of mind. Consequently, the court found the impugned orders unsustainable in law.Conclusion:The court set aside the impugned orders and remanded the matters for fresh consideration. The respondents were directed to comply with the appellate authority's directions, consider the petitioners' replies, and provide an opportunity for a hearing within eight weeks. The court also issued several guidelines for the commercial taxes department to ensure timely and proper implementation of court orders and assessment procedures.Guidelines Issued:1. Circulate the court order to all assessing authorities.2. Initiate recovery proceedings immediately after the appeal period if no stay order is communicated.3. Ensure territorial joint commissioners follow up on recovery actions.4. Send a copy of attachment or recovery orders to the assessee.5. Strictly follow and implement court or appellate authority directions within the specified timeframe.6. Ensure professional charges for contempt petitions are borne by the erring official, not the government.7. Recover losses due to assessing officer's omissions from the delinquent officer.8. Territorial joint commissioners should follow up on actions taken without influencing decisions.9. Legal wing to inform joint commissioners of case results for follow-up.10. Commissioner to set up a separate wing to monitor court order enforcement.The registry was directed to send a copy of the order to the Principal Secretary to Government, State of Tamil Nadu, Commercial Taxes Department, Chennai, and the Commissioner of Commercial Taxes, Chennai.