Madurai Bench quashed assessment orders for Assessment Years 2011-12 to 2013-14, holding authority violated natural justice by applying a 70:30 formula without verifying available account books, remitting matter for fresh orders.
Writ petitions allowed; impugned orders quashed; remitted to respondent to pass orders afresh.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
W.P.(MD)No.10748 to 10750 of 2015
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 09.03.2021 CORAM: THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN W.P.(MD)Nos.10748 to 10750 of 2015 and M.P.(MD)Nos.1. 1 & 1 of 2015
Tvl.V.D.B.Projects (P) Ltd., Rep. by its Director Mekapati Abhinav Reddy, No.55, V.P.Ratinasamy Nadar Road, Chokkikulam, Madurai-2.
... Petitioner in all W.Ps. -Vs-
The Assistant Commissioner (CT), Chokkikulam Assessment Circle, Madurai-20. ... Respondent in all W.Ps.
Prayer in W.P.(MD)No.10748 of 2015: Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, to call for the records on the file of the respondents in TIN No.33075003313/2011-12, dated 30.04.2015 and quash the same as invalid, illegal and against the principles of natural justice.
Prayer in W.P.(MD)No.10749 of 2015: Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, to call for the records on the file of the respondents in TIN No.33075003313/2012-13, dated 30.04.2015 and quash the same as invalid, illegal and against the principles of natural justice.
Prayer in W.P.(MD)No.10750 of 2015: Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorari, to call for the records on the file of the respondents in TIN No.33075003313/2013-14, dated 30.04.2015 and quash the same as invalid, illegal and against the principles of natural justice.
For Petitioner : Mr.A.Chandrasekaran For Respondent : Mr.G.Arjunan (in all W.Ps.) Government Advocate
COMMON ORDER
Heard the learned counsel on either side.
2.The petitioner has filed these writ petitions in respect of the assessment years 2011-12, 2012-13 and 2013-14. The petitioner is a civil contractor. Their returns were finalised under Section 22 of TNVAT Act. Subsequently, the Enforcement Wing Officials inspected the petitioner's business premises on 30.01.2014. Certain https://hcservices.ecourts.gov.in/hcservices/
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discrepancies were noticed. Based on the report of the Enforcement Wing Officials, pre-revision notices were issued by the respondent on 05.09.2014 and 06.11.2014 for those assessment years. The petitioner submitted his replies dated 10.10.2014. Ignoring the stand taken by the petitioner, the respondent issued a fresh prerevision notices dated 19.01.2015. In response thereto, the petitioner gave his reply dated 29.01.2015. There was also a personal hearing. The petitioner attended the same and gave a letter dated 13.02.2015 asking for further time.
3.According to the respondent, such time was granted, but the petitioner appeared again with the relevant records and therefore, the respondent was left with no other option but pass the impugned orders dated 30.04.2015. Challenging the same, these Writ Petitions have been filed. The respondent has filed a counter affidavit in all these writ petitions and the learned Government Advocate took me through their contents.
4.The core argument of the learned Government Advocate is that the petitioner was directed to pay 25% of the tax demanded as a condition for grant of interim order and that the petitioner has failed to comply with the same. Secondly, he would point out that the principles of natural justice as well as the procedure set out in Section 27 of TNVAT Act were scrupulously followed by the assessing authority and that, therefore, no case for interference has been made out. He also would add that the impugned orders are appealable and therefore, for non exhaustion of alternative remedy, these writ petitions deserve to be dismissed.
5.I carefully considered the rival contentions and went through the materials on record. It is true that interim order was granted in favour of the petitioner at the time of admission on condition that the petitioner should deposit 25 % of the tax amount. It is equally true that the petitioner did not comply with the said condition. The question is whether the petitioner can be non suited on that ground.
6.I am of the view that if the petitioner did not comply with the condition, interim order granted in his favour stood vacated and it was open to the authority to have initiated the recovery measures. The respondent does not appear to have done so. In any event, the failure to comply with the condition stipulated, while granting interim order, cannot result in automatic dismissal of the writ petition at the final hearing stage.
7.The petitioner's counsel would point out that the petitioner is primarily engaged in civil contract works in the Public Works Department. He would also state that in response to the show cause notices, the petitioner has given replies. The learned counsel took me through the manner in which, the orders have been passed. Except https://hcservices.ecourts.gov.in/hcservices/ extracting the objections given by the petitioner, there is
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virtually no consideration of the petitioner's stand. The respondent has proceeded on the premise that since the petitioner has accepted their omissions before the Enforcement Wing Officials, the issue stood concluded.
9.Since the authority has straight away invoked the said formula without undertaking the exercise of ascertainment, the orders impugned in these writ petitions are liable to be quashed. These Writ Petitions are allowed. The matter is remitted to the file of the respondent to pass orders afresh in accordance with law. Consequently, connected miscellaneous petitions are closed.
10.Even before commencing his arguments, the petitioner's counsel submitted that the petitioner would remit 5% of the tax demanded on or before 26.03.2021. This undertaking given by the petitioner's counsel, on instructions, is recorded.
11.Even though I have quashed the impugned orders in these writ petitions for the reasons set out above, if the petitioner fails to adhere to the undertaking now given before this Court, the order now passed would stand automatically recalled and the writ petitions would be dismissed.
Sd/Assistant Registrar(CS-II)
// True Copy //
/ /2021 Sub Assistant Registrar(CS)
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W.P.(MD)No.10748 to 10750 of 2015
rmi
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To
The Assistant Commissioner (CT), Chokkikulam Assessment Circle, Madurai-20.
+1 CC to M/s.A.CHANDRASEKARAN, Advocate ( SR-9764[F] dated 10/03/2021 )
+1 CC to M/s.SPL GP ( SR-10151[F] dated 10/03/2021 )
W.P.(MD)Nos.10748 to 10750 of 2015 and M.P.(MD)Nos.1. 1 & 1 of 2015 09.03.2021
TP(CO) TR(25.03.2021) 4P 4C
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2 issues framed by the court
Whether failure to comply with interim order condition for deposit of tax bars dismissal of writ petition.
Whether assessment order passed without verifying account books invoking 70:30 formula lapses principles of natural justice.
Colour shows how this judgement treated each authority
Amutha Metals Vs. Commercial Tax OfficerFollowed¶24
Amutha Metals Vs. Commercial Tax Officer, Mannady (East), Assessment Circle, Chennai (2007) 9 VST 478 (Mad)
3 provisions across 2 enactments
Tvl.V.D.B.Projects (P) Ltd., Rep. by its Director Mekapati Abhinav Reddy
The Assistant Commissioner (CT), Chokkikulam Assessment Circle, Madurai-20.
G.R. Swaminathan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
