Court rules in favor of petitioner, allowing Section 84 application post appeal directive.

The court ruled in favor of the petitioner, holding that filing a Section 84 application after being directed to file an appeal was permissible. It found a violation of natural justice but proceeded to adjudicate on legal issues. The court determined that the tax deduction scheme under the TNVAT Act was misappreciated, allowing the petitioner to remit payments without deduction based on valid certificates. The classification of the order dated 28.05.2019 was clarified, leading to the quashing of both the impugned orders. The Writ Petition was allowed without costs, and the connected Miscellaneous Petition was closed.

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Issues Involved:
1. Permissibility of filing a Section 84 application after being directed to file an appeal.
2. Violation of principles of natural justice in the impugned order.
3. Proper scheme of tax deduction under the TNVAT Act and its application in the present case.
4. Classification of the order dated 28.05.2019 under Section 13 or Section 27 of the TNVAT Act.

Detailed Analysis:

1. Permissibility of Filing a Section 84 Application:
The court held that once a challenge under Article 226 of the Constitution is rejected and the petitioner is relegated to a statutory remedy, the petitioner is at liberty to avail any statutory remedy under the Act, including appeal, revision, or any other. Therefore, the resort to Section 84 by the petitioner was not misconceived, and the rejection of the Section 84 application by the Assessing Officer solely on the ground that only an appeal should have been filed was erroneous. This issue was answered in favor of the petitioner.

2. Violation of Principles of Natural Justice:
The court found that no opportunity had been granted by the Officer before passing the impugned order, which was contrary to the principles of natural justice. However, since all necessary facts for adjudication were available on record, the court refrained from setting aside the order and proceeded to adjudicate the legal issues on merits.

3. Proper Scheme of Tax Deduction under the TNVAT Act:
The court detailed the provisions of Section 13 of the TNVAT Act, which mandates the deduction of tax at source by a contractee/payor to a contractor/payee at stipulated rates. Exceptions include situations where no transfer of property in goods is involved, or the contractor produces a certificate of nil deduction. The court examined the certificates issued to Simplex Infrastructure Limited (R3) and found that the petitioner could remit payments without deducting tax at source based on valid Form S certificates. The impugned assessment and demand for the period 2016-17 were found to be based on a misappreciation of the scheme of tax deduction under Section 13, as the certificates covered the entirety of the contract value. This issue was answered in favor of the petitioner.

4. Classification of the Order Dated 28.05.2019:
The court analyzed whether the order dated 28.05.2019 was passed under Section 13 or Section 27 of the TNVAT Act. It was noted that the petitioner, being a trade union and not a registered dealer, was not subject to the provisions of Sections 20, 21, 22, and 27 of the Act. The court concluded that the order was not one of assessment under Section 27 but related to the consequences of non-deduction under Section 13(4), which is amenable to revision under Section 54. The court referenced a Division Bench decision in MI Steel Processing India Pvt. Ltd. v. The Assistant Commissioner (CT), which held that issues of tax deduction at source under Section 13 are not part of the assessment under Section 27 and are subject to revision. This issue was answered in favor of the petitioner.

Conclusion:
The court quashed both the impugned order dated 23.01.2020 under Section 84 of the TNVAT Act and the order of assessment dated 28.05.2019. The Writ Petition was allowed, and no costs were imposed. The connected Miscellaneous Petition was also closed.

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