TaxTMI 
TaxTMI 
2016 (12) TMI 819
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....bitrary. By way of an amendment the petitioners have prayed for an appropriate writ, order and direction quashing and setting aside the Circulars issued by respondent No.3 on 30.07.2016 bearing Nos.127 and 128 [Annexures J & K]. [3.0] Facts leading to the present Special Civil Application in nutshell are as under:[ 3.1] That in the case of petitioners - assessee for the assessment period of 01.04.2010 to 31.03.2011, an issue arose with regard to rate of tax to be charged on stainless steel wires manufactured by the petitioner No.1 under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "Act"). It was the case on behalf of the petitioner No.1 that the same would be covered either under Entry43 of the ScheduleII of the Act and in the alternate under Entry85 of ScheduleII of the Act. The Assessing Officer passed an Assessment Order dated 30.03.2015 rejecting the contention of the petitioner No.1 and held that stainless steel wires would fall under Residuary Entry. [3.2] Being aggrieved and dissatisfied with the order of the Assessing Officer, the petitioner No.1 preferred an appeal under Section 73 of the Act before the first Appellate Authority - respondent N....
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.... of the petitioners and Shri Kamal Trivedi, learned Advocate General has appeared with Shri Hardik Vora, learned Assistant Government Pleader on behalf of the respondents. [5.0] Shri Bhatt, learned advocate appearing on behalf of the petitioners has vehemently submitted that action of the respondent No.2 in not deciding the appeal preferred by the petitioners and in sending the matter to the respondent No.1 for preaudit, solely on the ground that if the appeal is allowed the same is likely to result into refund of Rs. 50 lakhs and above, is absolutely illegal and contrary to the binding decision of this Court in the case of M/s. Tanuj Agency Pvt. Ltd. (Supra). It is vehemently submitted by Shri Bhatt, learned advocate appearing on behalf of the petitioners that such a practice of preaudit has been deprecated and set aside by the Division Bench of this Court in the case of M/s. Tanuj Agency Pvt. Ltd. (Supra). [5.1] Now, so far as the challenge to Circulars dated 30.07.2016 (Annexures J & K) issued by the respondent No.1 are concerned, Shri Bhatt, learned advocate appearing on behalf of the petitioners has vehemently submitted that such a circular issued by the Commissioner ....
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....d that therefore the impugned Circulars being in clear violation of binding precedent, the same are required to be struck down. [5.4] It is further submitted by Shri Bhatt, learned advocate appearing on behalf of the petitioners that the Assessing Officer being a statutory officer appointed by the Act, is performing quasi judicial functions on behalf of the State. It is submitted that Appellate Authority is a quasi judicial authority before whom the Assessing Officer who has passed the impugned order can always be present to indicate his points to derive to a particular conclusion. It is submitted that any intermeddling by any other authority would be a direct influence on quasi judicial function which cannot be permitted in law. It is submitted that thus, the garb of the representation provided in the impugned notifications is nothing but influencing and intermeddling the superior officers in discharging of quasi judicial function by their subordinates. [5.5] It is further submitted by Shri Bhatt, learned advocate appearing on behalf of the petitioners that it is evident that the circular provides that before the Assessing Officer - Appellate Authority the representation whi....
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....rivedi, learned Advocate General appearing on behalf of the State. It is vehemently submitted by Shri Trivedi, learned Advocate General that as such the impugned circulars are only interdepartmental communications and have been issued by the Commissioner of Commercial Tax with the sole purpose of the effective representation of the government before the Assessing / Adjudicating Officer and that too in the high value cases. It is submitted that impugned interdepartmental circulars have been issued for fair and effective representation of the government case, before the appropriate Assessing / Adjudicating Authority to protect the interest of the Revenue and the public exchequer. It is submitted that by no stretch of imagination it is meant to bring undue pressure on the Assessing / Adjudicating Officers. [6.1] It is submitted that as it was found that like before the High Court and the Tribunal the government's stand is not represented by any government representatives before the Assessing Officer / Adjudicating Authority and therefore, there is a possibility of not placing the correct case of the government before the Assessing / Adjudicating Authorities and therefore, it has be....
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.... initiated. [6.4] It is submitted that proceedings after the Assessment Order / Appellate Order, till the issue of notice for revisional proceedings (if any) is only interdepartmental proceedings. It is submitted that the impugned circulars are meant to protect the interest of the Revenue. It is submitted that dealer is not a party to these internal proceedings as his rights are not affected. It is submitted that however if thereafter the revisional proceedings are initiated, the assessee will be given opportunity of being heard as provided under the Act. It is submitted that both the impugned circulars are therefore issued for the limited purpose of setting effective mechanism for government representation during Assessment / Adjudicating proceedings before the quasi judicial authorities for providing an opportunity of being heard to the State Government and further providing some internal mechanism so as to protect the interest of the Revenue. [6.5] Shri Trivedi, learned Advocate General has emphatically submitted that the State Government believes in independence of the quasi judicial authorities and therefore, as such they are free to pass any order in accordance with ....
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....he Revenue and the public exchequer. It cannot be disputed that as per the old practice there was no independent representation on behalf of the government. The dealers were represented through their consultant / Advocates. Therefore, strictly speaking the entire burden was upon the Assessing Officers. The Assessing Officers though being quasi judicial officers can be said to be representing the case of the Department also. Therefore, with a view to see that there is a proper government representation before the Assessing Officer / Adjudicating Officer like before the High Court and the Tribunal, it has been decided to form the GR Cell who after considering the material on record including the submissions made on behalf of the dealer would prepare the case in consultation with the Authorities forming part of the GR Cell and the same are required to be produced before the Assessing Officer / Adjudicating Officer and the Circulars further provide that thereafter the Assessing Officer / Adjudicating Officer is required to pass a speaking and reasoned order after considering the submissions made on behalf of the Government as well as made on behalf of the Dealer. From the procedure whi....
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....culars do not provide that the Assessing Officer and/or Adjudicating Officer and/or quasi judicial Authorities are required to pass the orders only on the basis of the government representations produced by the GR Cell. The impugned Circulars specifically provides that after the matter is prepared by the GR Cell, the same are prepared after considering the case on behalf of the dealer also, and thereafter the quasi judicial Authorities are required to pass a speaking and reasoned order after considering the government representations as well as representations made on behalf of the dealer. Therefore, it cannot be said that by such circulars the independence of the quasi judicial officers is taken away. [7.4] Now, so far as the procedure to be followed postAssessment Order is concerned, on fair reading of the entire Circulars and the procedure provided in the impugned Circulars, it appears that after the Assessment Orders are passed, thereafter the GR Cell shall consider the orders and consider the same visavis the material on record and thereafter prepare the grounds which shall be placed before the Appropriate Authority who can taken appropriate decision whether to file a revie....
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....nnot be said to be affecting the independence of the quasi judicial authorities. [7.6] Now, so far as the reliance placed upon para 19 of the decision of the Hon'ble Supreme Court in the case of B. Rajagopala Naidu (Supra) is concerned, there cannot be any two views with respect to the independence of the quasi judicial authorities. As observed by the Hon'ble Supreme Court in the said decision the Tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgment and that it is of the essence of fair and objective administration of law that the decision of the Judge or the Tribunal must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State. However, as observed hereinabove, by the impugned Circulars / interdepartmental instructions, it cannot be said that there is any extraneous guidance to the quasi judicial authorities. [7.7] Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Orient Paper Mills Ltd. (Supra) is concerned, on considering the said decision we are of the opinion that the said decision shall not be applicable to ....