The main legal point established in the judgment is the interpretation of the delegation of power by the Commissioner under Section 64(4) of the TNVAT Act and the limitations on sub-delegation, emphasizing the distinction between the power under Section 64(4) and the power under Section 65.

This Writ Petition has been filed challenging the report submitted by the Commercial Tax Officer, Group-II, Enforcement (Central), pursuant to a VAT Audit conducted in the business premises of the petitioner.

2. The petitioner, who is a registered dealer on the file of the fifth respondent under the provisions of the Tamil Nadu Value Added Tax Act (TNVAT Act) and Central Sales Tax Act, is a wholesale trader in pre-recorded audio & video cassettes and CDs. During September 2015, the business premises of the petitioner was subjected to VAT Audit by the officers of the fourth respondent department, pursuant to which a notice, dated 18.08.2015, was issued by the second respondent, Joint Commissioner (CT), Enforcement-I, directing the petitioner to produce the books of accounts, stock statements, records, registers, etc., for the period from 2007-08 and any other record specified during the audit. The petitioner was directed to afford necessary facility to inspect such books of accounts or other documents, as required and which may be available at such places and afford necessary facility to check or verify the stock, which has been found and furnish such information as required as to any matter, which may be useful for or relevant to any proceedings under the TNVAT Act.

3. Mr. C. Backthasiromani, learned counsel for the petitioner contended that Section 64(4) of the TNVAT Act specifically empowers the first respondent alone to order and authorise the lower level officials like Commercial Tax Officer, Enforcement wing to conduct VAT Audit of the business place of any registered dealer and the VAT Audit conducted in the petitioner's business premises was as per the authorisation issued by the Joint Commissioner (CT), the second respondent, is illegal and without jurisdiction. It is further submitted that the Government has delegated the power to conduct VAT Audit only to the Commissioner of Commercial Tax Department and applying the principle of delegates non protest delegate, the Commissioner cannot further delegate his power to a subordinate officer, like the Joint Commissioner (CT). Therefore, it is submitted that the report submitted pursuant to such an VAT Audit, is not sustainable in law and therefore, the entire proceedings are vitiated. In support of such contention, the learned counsel placed reliance on the decision in the case of Jeevan Buy N.Save vs. Commissioner of Commercial Taxes, & Ors., [(2018) 50 GSTR 306 (Mad). Reliance was also placed on orders passed in W.P.No.7564 of 2015, dated 18.03.2015, [M/s. Arkema Peroxides India Pvt., Ltd., vs. The Joint Commissioner (CT), Chennai & Ors.,]; W.P.No.31616 of 2015, dated 25.02.2015 [M/s. Cabco Paradise Pvt. Ltd., vs. The Joint Commissioner CT & Ors]; and W.P.No.21587 of 2017, dated 27.11.2017, [M/s. M.D. Overseas Ltd., vs. Assistant Commissioner (CT) Peddunaickenpet Circle]. By placing reliance on these decisions, the learned counsel would submit that when the authorisation given by the Joint Commissioner for conducting the VAT Audit, is without jurisdiction, the report prepared based on such audit is equally without jurisdiction and therefore, the same requires to be set aside.

4. Mr. N.Inbarajan, with the leave of the Court, appeared as the Intervenor, supporting the stand taken by the petitioner. It is submitted by the learned counsel that Section 22(3) of the TNVAT Act, gives power to the Commissioner to select not exceeding 20% of the total number of assessments for details scrutiny regarding the correctness of the returns submitted by the dealer and in such cases, revision of assessment shall be made wherever necessary. It is submitted that the procedure to be followed is in terms of Rule 10(11) of the Tamil Nadu VAT Rules, which states that the method of selection by the Commissioner referred to in sub-section (3) of Section 22, shall be based on suitable s