Bench overturns tax assessment without proper authorization, emphasizes need for specific approval

The Bench set aside assessment orders, penalty orders, and interest payment orders passed by non-territorial officers following audits authorized by Deputy Commissioners of Commercial Taxes. The Court emphasized the need for specific authorization for assessment, distinguishing it from audit authorization alone. The Circular allowing a single authorization for both audit and assessment was deemed a deviation from precedent. The matters were directed back to Audit Officers for appropriate action, and previous appellate orders under the Value Added Tax Act were set aside. No costs were awarded.

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Issues involved: Challenge to assessment orders, penalty orders, and orders for payment of interest passed by non-territorial officer following an audit conducted with authorization from Deputy Commissioners of Commercial Taxes.

Summary:
The writ petitions were filed by Value Added Tax dealers challenging assessment orders, penalty orders, and orders for payment of interest passed by non-territorial officers following audits authorized by Deputy Commissioners of Commercial Taxes. The petitioners argued that the orders passed after the audit were unsustainable as there was no specific authorization for assessment, relying on a previous decision by the Bench. The Officer who passed the impugned orders contended that the assessment orders were passed in accordance with the authorization audit-cum-assessment programme issued by the Deputy Commissioner. A Circular was issued amending the authorization form to allow a single authorization for both audit and assessment, which was challenged as a deviation from the previous decision. The Bench referred to previous judgments emphasizing the distinction between authorization for audit and assessment, noting that the former alone would not suffice for assessment. Following the precedent, the assessment orders, penalty orders, and orders for payment of interest were set aside, and the matters were directed to the Audit Officers to submit audit reports to the Deputy Commissioner for appropriate action within eight weeks. Any dealers who had already appealed under Section 31(1) of the Andhra Pradesh Value Added Tax Act, 2005, would also have their appellate orders set aside. No costs were awarded in the matter.

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