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Judgment
M. Jaichandren, J.—Since, the issues involved in all the writ petitions are similar in nature, they are all taken up together and a common order is being passed.
In W.P. No. 267 of 2011, it has been stated that the Petitioner is a registered dealer, under the Tamil Nadu Value Added Tax, Act, 2006, dealing in textiles and readymade garments. As such, the Petitioner had effected the purchases from the local and other state dealers, within the state of Tamil Nadu. For the purchases effected from other state dealers, the Petitioner had furnished the C-Declaration Forms. The Petitioner has also been filing monthly returns in Form - I showing the Input Tax Credit and had also adjusted the same and the sale effected by them.
It has been further stated that, in the year 2006-2007, the Petitioner had filed their monthly returns in Form - I and had also remitted the tax dues, along with the returns. The necessary documents in support of the returns had also been filed. In such circumstances, the second Respondent ought to have accepted the same and should have passed an appropriate order, as per Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006. Similarly, for the assessment years 2007-2008, 2008-2009, 2009-2010 and 2010-2011, the Petitioner had filed the monthly returns, along with the tax dues. However, the second Respondent had not passed necessary orders accepting the returns.
It has been further stated that the Petitioner is maintaining all the necessary records, including the sales ledger. It would make it clear that the break-up of the value of the goods and the Value Added Tax amount collected had been remitted to the department, along with the monthly returns. Even though the returns had been filed, along with the documents showing the system of making invoices, the second Respondent had not found fault with the same and no adverse order had been passed against it.
It has been further stated that, as per the Tamil Nadu Value Added Tax Act, 1996, the assessments should be made for each year, if returns had been filed in time, along with the payment of tax dues. However, if the Department finds some mistakes, the assessments could be revised, u/s 27 of the Value Added Tax Act, 2006.
It has been further stated that the first Respondent had inspected the place of the Petitioner, on 11.11.2010, and had verified all the records maintained by the Petitioner, including the sales register and had affixed his signature on all the said documents. After the verification, the first Respondent had observed that the tax element not shown separately would also form part of the sales turnover and had forcibly collected the tax, by way of a cheque for a sum of Rs. 1,42,042/-, vide cheque No. 000375, dated 12.11.2010, drawn on City Union Bank Limited, Tiruvarur, as tax amounts, for the years 2006-2007 to 2010-2011. The said act of the first Respondent is arbitrary, illegal and contrary to the provisions of the Tamil Nadu Value Added Tax Act, 2006.
It had also been submitted that the second Respondent had not passed any order, u/s 22(2) of the Tamil Nadu Value Added Tax Act, 2006, and therefore, the collection of tax by the first Respondent, at the time of inspection, is not in accordance with the provisions of the Tamil Nadu Value Added Tax Act, 2006, including Section 65(3) of the said Act. In fact, the Petitioner had paid the amount, by way of cheques, under protest, as the payment had been made under coercion.
In the counter affidavit filed on behalf of the Respondents, in W.P. No. 23442 of 2010, it has been stated that the Petitioner is an Assessee on the books of the first Respondent. As such, Value Added Tax Audit, u/s 64(4) of the Tamil Nadu Value Added Tax Act, 2006, had been taken up by the Commercial Tax Officer (Enforcement), IV, Vellore, the second Respondent herein, on 18.11.2009, in the business premises of the Petitioner. During the course of the audit, it was found that the Petitioner had received a refund of input tax for the exports made. The Petitioner had claimed and had received the refund, which is more than the Input Tax Credit. Further, there was Sales Omission and availment of Input tax Credit on ineligible capital goods. For the said defects, the tax amount of Rs. 3,90,109,00/- and the interest of Rs. 1,01,601.00/-, amounting to a total sum of Rs. 4,91,710.00/- had been voluntarily paid by the Petitioner, by way of a cheque, which had been realised, on 1.12.2009, and credited into the Government Account.
It had also been stated that it was found that the Petitioner was not maintaining true and correct accounts, as prescribed in Sub-section (1) of Section 64, read with Rule 6 of the Tamil Nadu Value Added Tax Rules, 2007. The purpose of Audit was to find out, if there was any concealment of purchases or sales, in order to arrest the leakage of revenue and if there was any undue enrichment. If the Petitioner had accepted the defects in his accounts and had agreed to pay the tax, it cannot be said that the amount had been paid under threat or coercion.
It had also been stated that no shop inspection, u/s 65, had taken place, as stated by the Petitioner. It was only a Value Added Tax Audit, u/s 64(4) of the Act. The procedures mentioned in the Tamil Nadu General Tax Act, 1959, cannot be extended to the Tamil Nadu Value Added Tax, 2006, wherein, the assessment is a self assessment, u/s 22(2) of the Act and therefore, there can be no question of summoning of accounts. As such, the writ petition is devoid of merits and therefore, it is liable to be dismissed.
The learned Counsels appearing for the Petitioner had relied on the following decisions in support of his contentions:
Hotel Blue Nile v. State of Tamil Nadu (MAD.) (1992) 87 STC 513).
M/s. Kumar Commercial Agencies v. Deputy Commercial Tax Officer (1993(4)M.T.C.R.563).
M/s. Outdoor Advertising Services, Rep. by its Proprietor R. Murali v. The Deputy Commercial Tax Officer (Enforcement) and Anr. (W.P. No. 29341 of 2005, Dated 10.9.2009)
M/s. Keeran Builders Private Limited Rep. by its Managing Director E. Nakkeeran v. The Assessment Commissioner (CT) (ENFT), and Anr. (W.P. No. 212 of 2011, Dated 25.1.2011)
In view of the submissions made by the learned Counsels appearing for the Petitioner, as well as the Respondents and in view of the decisions cited supra and in view of the records available, it is clear that no assessment order had been passed, in respect of the assessment years concerned.
It is not in dispute that, for assessing the tax liability of the Petitioner, a pre-assessment notice ought to have been issued to the Petitioner, by the Respondents. Thereafter, an assessment order ought to have been passed, after giving an opportunity of hearing to the Petitioner, including the permitting of the Petitioner to raise its objections. Without following the said procedures, the collection of the alleged tax due from the Petitioner by the Respondents, cannot be held to be valid in the eye of law. In such circumstances, the Respondents should refund the tax amounts, collected by the Respondents, from the Petitioner, as prayed for by the Petitioner, in the present writ petition, within a period of six weeks from the date of receipt of a copy of this order. Accordingly, the writ petition stands allowed. No costs.
In view of the order passed, in W.P. No. 267 of 2011, the writ petitions, in W.P. No. 21544 of 2010 and 23442 of 2010 are allowed, directing the Respondents to refund the tax amounts collected by the Respondents from the Petitioners, as prayed for by the Petitioners, in the present writ petitions, within a period of six weeks from the date of receipt of a copy of this order. However, it is made clear that it would be open to the Respondents to pass assessment orders for the assessment years concerned, after issuing the pre-assessment notices to the Petitioners and by giving an opportunity to the Petitioners to raise their objections, if any. Further, it is made clear that the Petitioners are not entitled to demand the payment of interest from the Respondents. No costs.