Special Committee power under sales tax law applied narrowly as arbitrary rejection and assessment orders were set aside for fresh assessment.

Section 16-D of the Tamil Nadu General Sales Tax Act empowers the Special Committee to scrutinise orders where there is violation of the Act, the rules, or natural justice, and to direct fresh assessment where warranted. The Madras High Court found the Committee's rejection order arbitrary because it did not address earlier judicial directions or the merits, and held that the assessment orders had merged with the Committee's order. The impugned order and the assessment proceedings were set aside, and the matters were remanded for fresh assessment by the assessing officer with an open and independent mind, uninfluenced by the Enforcement Wing report or the Joint Commissioner's directions.

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Issues: Whether the Special Committee had acted within the scope of its power under Section 16-D of the Tamil Nadu General Sales Tax Act, 1959, and whether the assessment orders for the relevant assessment years were liable to be set aside and remanded for fresh consideration.

Analysis: Section 16-D enables the Special Committee to scrutinise proceedings or orders where there is a violation of the Act or the rules or a breach of natural justice, and to pass appropriate orders including directing a fresh assessment. The impugned rejection order failed to address the earlier directions of the High Court and did not reflect any real consideration of the merits. The Court held that the committee's approach was arbitrary and that the assessment orders had merged with the committee's order. In the circumstances, the Court exercised jurisdiction to set aside the assessment proceedings as well and directed a fresh assessment by the assessing officer with an open and independent mind, uninfluenced by the Enforcement Wing report or the Joint Commissioner's directions.

Conclusion: The challenge succeeded to the extent that the impugned order and the assessment orders were set aside, and the matters were remanded for fresh assessment.

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