High Court · 2006

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 09.08.2006Coram :THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANWrit Petition No.25001 of 2006M/s. Sree Murugan Engineering Products, rep. by its Partner A.Muruganandham,No.201, Dr.Nanjappa Road, Coimbatore.Petitioner v.The Commercial Tax Officer,Dr. Nanjappa Road Circle, Coimbatore.Respondent Writ petition filed under Article 226 of the Constitution ofIndia for the issue of writ of certiorari calling for the records onthe file of the respondent herein in his proceedings in TNGSTNo.2140614/2003-2004 dt. 30.6.2006 and quash the same.For Petitioner:Mrs.HemalathaFor Respondent:Mr.A.Shanmugasundaram,Government AdvocateORDERThe petitioner has approached this Court for the relief ofissuance of writ of certiorari calling for the records of the firstrespondent, Commercial Tax Officer, Coimbatore and quash hisproceedings dated 30.06.2006, whereby assessment for the assessmentyear 2003-04 has been framed in respect of the petitionerdetermining the tax due in a sum of Rs.2,94,561/- and surcharge in asum of Rs.14,726/- resale tax due in a sum of Rs.38,201/- andfurther levied penalty under section 12(3)(b) of the Tamil NaduGeneral Sales Tax Act in a sum of Rs.42,907/-. That order iscanvassed before this Court on the ground that a turnover in a sumof Rs.14,85,636/- in respect of sale is covered by Form XVII. Asthe purchasing dealer has contravened the condition of Form XVII,tax and penalty could be imposed in respect of that turnover onlyagainst the purchasing dealer and not against the petitioner, who isthe selling dealer, as per the section.2. In order to sustain the case, an order of the Division Bench https://hcservices.ecourts.gov.in/hcservices/ of this Court in the case of State of Tamil Nadu v. Madras PetrolChem Ltd., 89 STC 438 has been cited. The petitioner has alsoannexed an unreported order of the Division Bench dated 04.12.2001made in writ petition No.10610 of 2000 (State of Tamilnadu v. SeemaUdyog) and two interim orders granted by this Court in WPMPNos.22290 and 22292 of 2004 in writ petitions Nos.8677 and 18678 of2004 dated 14.07.2004 (M/s. Screenwell India v. DCTO) and the ordermade in writ petition No.7753 of 2006 by a learned single Judge ofthis Court dated 21.03.2006 (M/s. Screenwell India v. DCTO) .3. Heard the learned counsel for the petitioner and perused thematerials available on record.4. The only point that has been canvassed for assailing theimpugned assessment order is that as per section 3(3) of the TamilNadu General Sales Tax Act, the selling dealer cannot be held liablefor the contravention of the conditions of declaration in Form XVIIand as per the proviso to Section 3(3) of the Act, only thepurchasing dealer is held responsible in the event of the goods sopurchased by production of Form XVII has not been utilised for thepurpose for which the declaration was produced, and that action canbe taken only against the purchasing dealer, that too, for thepayment of difference tax on the turnover relating to the sale ofgoods. In this case, contrary to the statutory provisions action hasbeen taken against the selling dealer.5. The Bench decision in the case of State of Tamil Nadu v.Madras Petrol Chem Ltd., 89 STC 438, was a case which considered therelevant provision, which was in existence during the assessmentyear 1978-79. It is clear from paragraph 6 of the said judgment,section 3(3), as it stood at that relevant point of time, has beentaken into consideration. In paragraph 10 of the said judgment theCourt proceeded to the effect that having regard to the subsequentlegislative enactment referred to therein, the Court has taken theview that no action could be taken against the purchasing dealer byfollowing the earlier judgment in the case of Premier Electro-Mechanical Fabricators v. State of Madras, (1968) 22 STC 269. Thesame is the position in respect of the unreported judgment of aDivision Bench of this Court dated 04.12.2001 referred to supra asthe relevant assessment year in that case is 1984-85. In that casealso, taking into consideration the reported judgment in the case ofState of Madras v. Radio and Electricals Ltd., (18 STC 222) andhaving specific reference to section 3(3) of the Tamil Nadu GeneralSales Tax Act, the Supreme Court has held that the duty of theassessing officer in respect of the declaration form furnished bythe selling dealer is to see whether the form is only genuine andthe duty of the seller receiving such a declaration is to make surethat the declaration has been duly filled in and signed by thepurchasing dealer and that the form given to the seller is the oneprescribed and obtained from the prescribed authority. The duty ofthe seller ends there. The selling dealer was under no further https://hcservices.ecourts.gov.in/hcservices/ obligation to enquire into whether the buyer is engaged in a processor manufacture and if so, whether the article purchased from theseller are to be put to use as the component part or the productmanufactured by the buyer. The above said cases reached this Courtafter exhausting all the statutory remedies under the Act.6. The other single Judge's judgment dated 21.03.2006 (M/s.Screenwell India v. DCTO) is in respect of the assessment year 2004-05. But the learned single Judge has not considered any assessmentorder in that case. What was put in issue in that case was a preassessment notice. In the circumstances of the case and also havingregard to the submission made by the Special Government Pleaderappearing for the revenue to the effect that direction may be issuedto the respondent to follow the law laid down by this Court in writpetition No.10610 of 2000 dated 04.12.2001, the respondent thereinwas directed to consider Form XVII submitted by the assessee andlevy tax only at 3% and not at 16% as mentioned in the pre-assessment notice. 7. In all the above said three cases, arguments have beenadvanced and considered by the Court with reference to section 3(3)of the Tamil Nadu General Sales Tax Act. But as on date, statutoryposition is not as it was during the time the above referred tocases were considered. Even the section 3(3) of the Tamil NaduGeneral Sales Tax Act has been considerably amended and furthermore, section 10, which provides for burden of proof on the dealer,who claims that he is not liable to pay tax, has not been taken upfor consideration. The other important factor is that sub-clause(3) has been introduced to section 10 by Amendment Act 60/1997 witheffect from 06.11.1997 which provides that, 'where any dealerknowingly produces a false bill vouchers declaration, certificate orother document with a view to support or make any claim that atransaction of sale or purchase effected by him is not liable to betaxed or liable to be taxed at a lower rate, the assessing authorityshall on detecting such production direct the dealer producing suchdocument to pay as penalty a sum – (i) which shall be in the case offirst such deduction fifty percent of the tax due in respect of suchtransaction; and (ii) which shall be in the case of second orsubsequent deductions one hundred per cent of the tax due in respectof such transaction.' This piece of statutory provision has notbeen taken into consideration in any one of the judgments. At thetime of rendering of the judgment of the Division Bench, sub clause(3) was not incorporated in the section, and the earlier portion ofthe provisions which was in the statute book has been agitatedbefore the Court.8. Even in this writ petition all the grounds that have beentaken are only in respect of Section 3(3) of the Act with referenceto earlier decisions of this Court. The order impugned is anassessment order in respect of the assessment year 2003-04, which isin all fairness amenable to appellate provision provided under the https://hcservices.ecourts.gov.in/hcservices/ statute book itself. The contention of the petitioner that theselling dealer cannot be penalised for the infraction in thedeclaration filed by the purchasing dealer and whether penalty canbe levied on the selling dealer having regard to section 10 withparticular reference to section 10(3) are all matters that canvery well be agitated before the appellate authority. The availingof appellate remedy is onerous cannot be a point for invoking theextraordinary jurisdiction under Article 226 of the Constitution ofIndia, particularly in the fiscal statutes. While consideringanother fiscal enactment, i.e., the Central Excise Act, the SupremeCourt has, in the case of Union of India v. Tata Engineering &Locomotive Co. Ltd., AIR 1998 SC 287, held as follows :“4. In our view, this petition should not have beenentertained by the High Court at all. The AssistantCollector is entitled to complete the assessment as hethinks fit in exercise of his judgment and according to hisunderstanding of the law and facts. For this purpose, hecan call for and examine whatever documents he considersrelevant. If the Assistant Collector fails to follow anyjudgment of the High Court or this Court, the assessee hadadequate statutory remedies by way of an appeal andrevision against the assessment order. The Court should nottry to control the mode and manner in which an assessmentshould be made. If the Assistant Collector is of the viewthat enquiries are necessary to be made as to the price atwhich trucks were sold at the Regional Sales Offices, theCourt cannot stop him from making such enquiries.5. Mr Sorabjee, appearing on behalf of therespondents, has complained that the assessments are goingon endlessly and without due regard to an earlier judgmentof the Patna High Court in respect of an earlier assessmentyear on the very same issues. Whether the controversyraised in this case is covered by an earlier judgment ofthe High Court is a matter to be decided by the AssistantCollector. He will have to decide all questions of fact andlaw. He has to make whatever enquiries he thinks necessaryfor determination of the value of excisable goods. The HighCourt in exercise of its jurisdiction cannot give guidanceto the Assistant Collector about the manner and mode inwhich the assessment should be made."The latest judgment of the Supreme Court dated 16.2.2006 made inCivil Appeal Nos.7323-7325 of 2000 (Ms/Sabari Jewellery Vs. DeputyCommercial Tax Officer) is also to the same effect.9. This case is a clear example to the above said factualsituation. The order impugned is virtually an order appealableunder the statute. The appealable time has also not expired. As amatter of fact, it is admitted across the Bar by the learned counselfor the petitioner that the order challenged in this writ petition https://hcservices.ecourts.gov.in/hcservices/ has been received by the petitioner on 15.07.2006. Appealable timeis still available. Conveniently the original order has not beenfiled, which is a statutory requirement for filing a writ petition,but a petition in MP. No.1 of 2006 has been filed to dispense withthe production of the original order. The reason given for notfiling the original order is more wild. At paragraph 6 of theaffidavit the petitioner has stated that he is not able to file theoriginal proceedings of the respondent dated 30.06.2006 and thepetitioner has filed only a certified copy. Learned counsel for thepetitioner tenders apology across the bar for not stating any reasonfor filing the original order. The same is accepted, but, however,it shows that the petitioner is taking a chance before this Court byretaining the original order so as to file an appeal, if the writpetition is not entertained by this Court. This sort of attitudehas to be deprecated and the same is deprecated.10. In the light of the reasons stated in the foregoingparagraphs, this writ petition is dismissed. No costs. Themiscellaneous petitions are consequently dismissed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarmfToThe Commercial Tax Officer,Dr.Nanjappa Road Circle, Coimbatore.+1cc to M/s.R.Hemalatha, Advocate Sr 36058+1cc to the Spl. Govt. Pleader (T) Sr 35877MM (CO)km/25.8.WP.No.25001 of 2006