Commissioner has sole authority for VAT audits under TNVAT Act. Court sets aside audit proceedings.

The court held that only the Commissioner, not the Joint Commissioner, has the authority to authorize VAT audits under the TNVAT Act. It dismissed the petitioner's arguments regarding the 2014 circular and emphasized strict adherence to statutory provisions. The court allowed the writ petition, setting aside the VAT audit proceedings and revision notices, directing the respondents to conduct the audit in compliance with Section 64(4) of the TNVAT Act, 2006.

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Issues: Validity of VAT audit based on authorization by Joint Commissioner under TNVAT Act.

The petitioner, a registered dealer under the TNVAT Act, challenged the validity of a VAT audit conducted by officials based on authorization from the Joint Commissioner. The petitioner contended that as per Section 64(4) of the TNVAT Act, only an Officer not below the rank of Deputy Commercial Tax Officer can conduct such audits. Citing a Supreme Court decision [(2008) 9 SCC 177], the petitioner argued that statutory provisions must be strictly followed. Additionally, the petitioner relied on circular instructions from 2014, stating that an assessee cannot be audited a second time if already audited after 01.01.2007. The jurisdiction of the Joint Commissioner to authorize the audit was questioned, referencing a previous case where it was held that only the Commissioner can authorize VAT audits.

The court noted that statutory provisions must be adhered to strictly. Referring to the previous case law, the court emphasized that only the Commissioner, not the Joint Commissioner, has the authority to authorize VAT audits. The court dismissed the petitioner's interpretation of the 2014 circular, stating that it is merely recommendatory and does not carry the force of law. The court held that if the Commissioner deems an audit necessary, there should be no restriction on exercising that power. Consequently, the court allowed the writ petition, setting aside the VAT audit proceedings and revision notices, directing the respondents to conduct the audit in accordance with Section 64(4) of the TNVAT Act, 2006.

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