Independent assessment required in VAT escaped turnover cases; order set aside for relying on Enforcement Wing report.

The Madras HC held that an escaped turnover assessment under the Tamil Nadu VAT Act cannot rest merely on Enforcement Wing materials without independent application of mind by the assessing authority. Applying the Narasus and Madras Granite principles, the Court found the impugned order vitiated because it reflected adoption of the proposal rather than a assessment on the merits. The assessment order was set aside, and the matter was remitted for a fresh assessment to be completed independently and in accordance with law, after furnishing photocopies of the D-7 records within the stipulated time.

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Issues: Whether the assessment order made under section 27 of the Tamil Nadu Value Added Tax Act, 2006 was liable to be set aside for having been made without independent consideration, solely on the basis of the Enforcement Wing report, and whether a fresh assessment was to be directed.

Analysis: The assessment was challenged on the ground that the assessing authority had proceeded on the Enforcement Wing materials without independently applying its mind, contrary to the settled principle that an escaped turnover assessment must be made on the basis of an independent assessment and not as a mere adoption of the Enforcement Wing's proposal. The Court held that the issue was covered by earlier orders in similar matters and that the impugned order suffered from infraction of the Narasus and Madras Granite principles. The Court therefore set aside the assessment order and directed the respondent to furnish photocopies of the D-7 records and to complete a fresh assessment independently and in accordance with law within the time stipulated.

Conclusion: The impugned assessment order was quashed, and the matter was remitted for fresh assessment on its own merits, with the assessee obtaining relief on the legality of the original assessment order.

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