The Madras High court, in a recent decision, observed that the revision order section 34 of the Tamil Nadu General Sales Tax (TNGST) Act cannot be passed solely on the basis of the Report of Inspecting officers.The Court opined that under section 34, wide powers have been vested on the officer and therefore, it must be exercised if the officer deems that the order is necessary to safeguard the interest of the Revenue. It was further observed that the revisional authority cannot disbelieve an appellate order merely on the basis of the Report of Inspecting officers, which is, according to the Court, can only be treated as a first information report.
In the instant case, the assessee challenged the order passed by the assessing authority before the appellate authority. The appeal was disposed in favour of the assessee. Consequent orders were passed by the assessing authority giving effect to the said order. After one year, the Joint Commissioner of Commercial Taxes, suomotu initiated revision proceedings and passed an order by invoking his powers vested under section 34 of the TNGST Act by holding that the appellate order was against the interest of the Revenue.Being aggrieved, the assessee approached the High Court seeking relief.
The Court while analyzing the legality of the order impugned, observed that “On a reading of the impugned proceedings, it is evidently clear that the Revisional Authority has not interfered with the factual findings recorded by the Appellate Assistant Commissioner, which is an elaborate order dealing with all issues, item-wise. But, the Revisional Authority relied upon the statement/observation of the Inspecting Officer, who inspected the place of business of the petitioner. Thus, what the Joint Commissioner seeks to do is to confront the petitioner with the findings of the Inspecting Officer, which was admittedly done on 28.12.1995, much prior to the order passed by the Appellate Assistant Commissioner. Thus, the authority namely the Revisional Authority has not conducted any enquiry on his own while exercising the power under section 34 of the Act.”
The single bench while quashing the order, noted that “The report submitted by the Inspecting Officer in the opinion of this Court can be treated as first information report, based on which, action could be initiated by issuing notice. As this was not done, it resulted in an order of dismissal, which has been set aside by the Appellate Authority by an order dated 24.09.1997. The Appellate Authority’s order is a well reasoned order, which dealt with each of the items. Therefore, the Revisional Authority cannot contend that what was stated by the Dealer before the Inspecting Officer was different and he cannot for that reason reject or interfere with the order passed by the Appellate Assistant Commissioner. The Revisional Authority should have come to a conclusion that the order of the Appellate Assistant Commissioner suffers from illegality, resulting in prejudice to the interest of the Revenue. Therefore, this Court is of the view that the order passed by the Revisional Authority solely based upon the report of the Inspecting Officers could not have been a basis for disbelieving the stand taken by the petitioner before the Appellate Authority, which decision was arrived at based on the facts placed before the Appellate Authority. Further, the Revisional Authority does not dispute the factual position and if such is the case, no case has been made out for reviewing the order passed by the Appellate Authority. Therefore, the impugned order calls for interference”.
Read the Judgment here.
