TaxTMI 
TaxTMI 
2016 (12) TMI 369
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....s of assessment for the years 1999-2000 to 2003-2004. 3. The petitioner is a dealer in Iron and Steel, they have been carrying on business for several decades, their returns have been assessed periodically and they have been granted second sale exemption for various assessment years, except for the five assessment years, which are the subject matter of these Writ Petitions. 4. The place of business of the petitioner was inspected by the Enforcement Wing Officials between 30.07.2003 and 14.08.2003. A report was given by the officials of the Enforcement Wing on 31.03.2004 to the first respondent which is referred to as a D-3 proposal, when the provisions of TNGST Act were in vogue. That resulted in issuance of a show cause notice dated 31.05.2004 for the assessment year 1999-2000. Similar notices were issued for the other assessment years as well. 5. The sum and substance of the allegations against the petitioner Agency was that they have failed to prove the movement of goods, with the details of freight paid, loading and unloading charges paid, way bill number with date, name and address of the transporters, etc. Further they have not produced any proof for the turnover for....
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.... deviation proposal is not accepted. It is thereafter, a proposal was given by the first respondent to the Assistant Commissioner (CT), Zone-I dated 28.03.2005, stating that no reasons have been given by the Deputy Commissioner for rejecting the deviation to the D3 proposal and therefore requested the deviation proposal to be considered. The Assistant Commissioner in turn addressed the first respondent by letter dated 11.10.2007, stating that the deviation proposal has been rejected by the Joint Commissioner (CT), by an order dated 21.09.2007 and requested the first respondent to implement the D3 proposal dated 31.03.2004. It is thereafter, a notice was issued by the first respondent dated 29.09.2008, giving a final opportunity to the petitioner to file their objections. In the said notice, it was stated that no third party statement is relied upon or any records seized from any other agency has been used to make out the proposal. Such observation was in response to the petitioner's request for cross examination of the persons, who are said to have given statements against the petitioner. 8. Thereafter, two separate notices were issued on 10.10.2008, for the years 2002-2003 ....
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.... assessment came to be passed and the proposals in the show cause notices were confirmed. Challenging those orders of assessment, the petitioner is before this Court. 10. Mr.C.Natarajan, learned Senior Counsel assisted by Mr.P.Rajkumar, learned counsel for the petitioners, elaborately referred to the factual averments and pointed out that the impugned proceedings are totally unsustainable and have been passed by way of implementation of the D3 proposals given by the second respondent and there is no independent application of mind by the Assessing Officer. 11. By referring to the phrases used in the pre-revision notices, it is submitted that there is a clear direction to implement the D3 proposals, and that is what the Assessing Officer has done. The learned Senior Counsel also referred to the deviation proposals submitted by the first respondent on 18.10.2004 as well as on 28.03.2005 and those proposals were rejected by the second respondent/Joint Commissioner, without even referring to the contents of the proposal nor considering the effect of it. The learned counsel also pointed out that the third respondent had sent an Arbitration proposal on 20.08.2009,....
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....uchirapalli & The Senior Superintendent of Post Officers, Tiruchi [(1971) 28 STC 221 (Mad.) (7) Bikabhai Prabhudas Parekh and Company Vs The Commercial Tax Officer (Additional Circle), South Kanara, Mangalore. (8) Munnalal Muralidhar V. Commissioner of Income Tax, U.P. [(1971) 79 ITR 540 (All.)] (9) Food Corporation of India V. Provident Fund Commissioner and Ors [(1990) 1 SCC 68]. (10) S.Hastimal V. Commissioner of Income Tax, Madras [(1963) 49 ITR 273 (Mad)] (11) Mehta Parikh and Co. Vs Commissioner of Income Tax, Bombay [(1956) 30 ITR 181 (SC)] (12) Sujana Universal Industries Limited V. DCTO, Valluvarkottam Assessment Circle [(2003) 23 VST 118 (Mad)] (13) DCCT, Coimbatore Division Coimbatore V. Sivakumar and Co. [(1980) 45 STC 436 (Mad)] With the above submissions, the learned Senior Counsel sought for setting aside the impugned orders and to remand the matter to the Assessing Officer for a thorough consideration of all the documents and redo the assessments. 14. Mr.S.Kanmani Annamalai, learned Additional Government Pleader appearing for the respondents reiterated the factual details which lead to the issuance....
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....was further held that the instructions given by the Assistant Commissioner had vitiated the entire proceedings as "the procedure adopted was, to say the least, unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the sales tax department. 18. In the case of Orient Paper Mills Ltd., V. Union of India [(1970) 3 SCC 76] (supra), the Hon'ble Supreme Court held that in respect of various taxation laws that the assessing authorities exercise quasi judicial functions and they have duty cast on them to act in a judicial and independent manner. If their judgment is controlled by the directions given by the Collector, it cannot be said to be their independent judgment in any sense of the word. An Appeal then to the Collector becomes an empty formality. 19. In the case of Indure Limited (supra), after taking note of the earlier decisions including the decision in the case of Orient Paper Mills Ltd., wherein the view expressed by Professor Wade in Administrative Law, Eighth Edition, 326, was referred to, which reads as follows: " Closely akin to delegation, and scarcely distinguishable from it in some cases, is....
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.... 54A of the Act and these sections are clearly intended for utilising for the benefit of both the assessee and the Department to gather evidence or information from the third parties. 23. In Ashok Electro Diamonds & ors (supra), the Writ Court issued a direction to the Assessing Officer to summon the postmaster concerned to furnish information regarding the articles sent by the assesses and sent back to the assessees in the course of their business. This direction was issued by taking note of the power under section 54 of the TNGST Act, which gives power to summon the witness and call upon the person to produce documents. Thus, the powers conferred on the Assessing Officer are wide enough to conduct a comprehensive enquiry into the matter. 24. Having noted the powers exercisable by the Assessing Officer under the provisions of the Act, it has to be seen as to how the assessee has to be dealt with by the Assessing Officer. In Munnalal Muralidhar, a case arising under the Income Tax Act, 1922, the Hon'ble Division Bench of Allahabad High Court, pointed out that if the Income Tax Officer is not satisfied as to the return made by the assessee under section 22 of the Act, he (....
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....osal is rejected and the assessing officer should implement the D3 proposal. Thus, it is a classical case where the assessing officer has been compelled to abdicate his statutory duty, eventually, the illegal assessment orders have been passed. 27. The learned Senior Counsel appearing for the petitioner referred to the decision of the Hon'ble Division Bench of this Court in the case of S.HASTIMAL(supra), to support the proposition that the assessee cannot be called upon to explain, not merely the origin and source of his capital contribution, but, the origin of origin and the source of source as well. Further, it is pointed out the fact by referring to the decision of the Hon'ble Division Bench of this Court in the case of SUJANA UNIVERSAL INDUSTRIES LIMITED (supra) that the initial burden under section 10 of the TNGST Act is on the assessee, which would be discharged by production of sale bill, and other information, such as registration certificate number under TNGST Act etc. of the selling dealer and thereafter, it is for the Department to verify the accounts of the selling dealers to find out the correctness. 28. Referring to the decision of the Hon'ble Divisi....
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....sistant Commissioner (CT), Enforcement (Central) and second sale exemption was allowed in so far as it relates to the purchases from SAIL. In the impugned assessment orders, the purchases effected from other companies i.e. other than SAIL have been denied the second sale exemptions. However, the Assessing Officer did not go into the merits of the assessment, but was solely carried away by the dispute with regard to the constitution of the petitioner and devoted much attention to the said contention and by over ruling the objections raised by the petitioner, confirmed the proposal in the pre-revision notice. Thus, the impugned orders are flawed for reasons that the merit of the assessments were not gone into by the Assessing Officer. So far as the constitution of the petitioner-M/s Steel Exchange House is concerned, various factual issues have been raised by the petitioner in the affidavits filed in support of the Writ Petitions which cannot be adjudicated in a Writ proceedings. 33. In the considered view of this Court, this issue should also be re-considered by the Assessing Officer, moreso, when this Court in W.P.Nos.20118 to 20123 of 2011, had set aside the earlier orders pass....