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TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 518
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....tated to be engaged in the purchase of products such as diapers, sanitary napkins, shampoos etc., from third party manufacturers to be sold through their depots either locally or outside the State or stock transfer to their depots and branches outside the State. 2. In these Writ Petitions, the petitioner has challenged the order of assessment passed by the first respondent, dated 10.10.2014, under the TNVAT Act for the year 2007-08 and 2008-09. 3. Between 01.06.2009 and 15.07.2009, the place of business of the petitioner was audited by the second respondent, during which the transactions done during the period from 01.01.2007 to 31.03.2009, is said to have been verified. The petitioner is stated to maintain their accounts through MFG-pro initially and later by System, Application and Products package (SAP). It is stated that SAP package is a German Multinational Software Corporation that makes software to manage business operations and customer relations. The SAP, Enterprise Resource Programme, [ERD], enables the user company to avail the benefits of customer package, which helps the company from sourcing stage to sales. The petitioner would state that during the course of audit,....
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....ro/SAP system. The statement is said to containing product wise details of opening, closing stock of raw materials, packing materials and finished goods and as per the statement, the closing stock as on 31.03.2008, in their depots located in various parts of Tamil Nadu was Rs. 1,03,48,39,123/-. The petitioner also expressed their readiness to produce additional details. Senior Executive of the petitioner appears to have met the first respondent on 31.01.2014, 05.02.2014 and 30.09.2014 and requested to drop all further proceedings. The petitioner sought to impress upon the first respondent that providing printed statements of their monthly purchase entries would be voluminous and therefore, requested permission to provide them in CD format. Alternatively, the first respondent was requested to visit their office premises, so that he can have direct access to the MFG-pro/SAP System. This request was made by the petitioner as the previous incumbent, who has occupying the office of the first respondent, had visited the office premises of the petitioner during March/April 2012 and he had thoroughly examined the books of accounts maintained in the MFG-pro/SAP System. The petitioner would ....
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.... goods, accounts, registers etc., in such office. 6. The learned counsel also referred to Rule 6 of the TNVAT Rules and submitted that the dealer is entitled to maintain accounts in electronic form and Rule 20 empowers officers to conduct search of any office, shop, place of business cum residence, godown etc. It is submitted that in the light of the above statutory provisions, the first respondent ought to have accepted the petitioner's offer to submit the accounts in CD format as it is voluminous or in the alternative could have accepted their offer to inspect the accounts in their office, which was done by the first respondent's predecessors earlier. Further, in the counter affidavit, the first respondent has accepted the fact that they have seen the SAP data, but would state that the data was inadequate and this averment contained in paragraph 4(b) of the counter affidavit is contradictory to the stand taken in para 7 of the counter affidavit. Further, it is submitted that the Chartered Accountant's certificate is sacrosanct in terms of Section 63A of the TNVAT Act and this provision shows the significance attached to the certificate issued by a qualified Cha....
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....e petitioner in CD form cannot be accepted, since the accounts are to be maintained in terms of Rule 6 of the Rules and Rule 6(2)(b) stipulates what are the particulars, that should be made available in the accounts and this Rule should be read along with Section 64, which mandates the form in which accounts, have to be maintained. Further, it is submitted that Section 65, is not applicable to the present proceedings. The learned counsel referred to the certain paragraphs of the counter affidavit and in particular paragraphs 4(a)(b)&(c). With the above submission, the learned counsel stated that if the petitioner was aggrieved, he should have preferred an appeal as against the impugned order and the petitioner should not be permitted to bypass such remedy available under the Act. 8. I have elaborately heard the learned counsels appearing for the parties and carefully perused the materials placed on record. 9. The sheet anchor of the submissions of the learned counsel appearing for the petitioner is on the ground that the impugned order of assessment has been passed in violation of principles of natural justice, it is an outcome of non-application of mind, it is not a fair exercis....
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....-lived, as the petitioner received another notice dated 06.12.2013, purportedly being issued in super-session of the earlier notices. Subsequently, another notice was issued on 22.09.2014, wherein it was accepted by the first respondent that the petitioner had filed a statement certified by a Chartered Accountant, but proceeded to state that the petitioner has not produced the relevant books of accounts to substantiate that the turnover was correctly reported. However, before rejecting the petitioner's contention, opportunity was given to the petitioner to produce the books of accounts to substantiate the correct turnover. The petitioner submitted their reply dated 30.09.2014 which appears to be a very elaborate reply, explaining the factual details and reiterating that there has been no suppression of turnovers and for the past 10 decades, the petitioner is a most respected business house in the state and a prompt tax payer. 12. The petitioner stated that they do not maintain separate profit and loss and account for its operation in the State of Tamil Nadu, however, as per the requirement of Income Tax Act and Companies Act, P&L and balance sheet are prepared on all India bas....
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....graph i.e., para 4(b), there is a statement made that the details furnished through SAP data, were inadequate. However, the first respondent appears to have lost sight of the fact that he is the Assessing Officer who is enjoined with the statutory duty to complete the assessment, inadequacy or adequacy of information gathered by the enforcement wing, is of no consequence, when the Assessing Officer takes up the case for assessment to tax. 16. In my view the report of the Enforcement Officer could at best be treated, as a first information report gathered based on audit in the place of business of the dealer. If such is the report, it can be only a prima facie material to initiate action in accordance with the provisions of the Act. The first information report is not a conclusive proof of a wrong having been committed. Thus, when the Assessing Officer issues a show cause notice based on the information furnished to him by the enforcement, and the dealer responds to the allegations and proposals in the notice, the Assessing Officer has to objectively analyse the explanation given by the dealer and the materials produced by him to dislodge the information passed on to the officer by....
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....n the anvil of the role of the Assessing Officer as explained above, then the only conclusion that could be arrived at is, that the Assessing Officer has abdicated his statutory duties. 19. The averments in the counter affidavit shows that the SAP data was examined by the enforcement and this Court is at a loss to understand as to why the Assessing Officer should not exercise his powers in examining the accounts maintained by the petitioner in a particular format. It is true that the Rules stipulate the manner in which the accounts have to be maintained. However, it is not the case of the first respondent that the data available with the petitioner does not confirm to the Rules. The petitioner's justification is that the accounts are maintained in that particular format, which is a specially designed software and this helps them in monitoring the business through out the country. The Assessing Officer is a statutory authority who plays a very vital role in assessing dealers to tax. Therefore, the endeavour of the officer should be to ensure that not a rupee of revenue payable to the Government is missed out in collection, that is why financial experts have said that an assessm....