The central legal point established in the judgment is the necessity for a personal hearing in matters requiring deliberation between the parties and the importance of the Assessing Officer independently applying their minds to the assessment matter.

JUDGMENT

(Prayer: Petitions filed under Article 226 of the Constitution of India praying to issue a writ of certiorarified mandamus to call for the records on the file of the respondent in TIN. 33511023840/ 2009-10, 2010-11, 2011-12, 2012-13, 2013 -14 dated 30.12.2019 and quash the same as illegal against the principles of natural justice and fair play and contrary to law and facts and direct the respondent to consider the objection independently without being influenced from the proposal received from the enforcement authority.)

Common Order:

1. This is a batch of five writ petitions challenging orders of assessment passed under the provisions of the Tamil Nadu Value Added Tax, 2006 (in short, ''the Act'') for the period 2009 – 2010 to 2013 – 2014.

2. The petitioner is a dealer under the provisions of the Act, a civil work contractor. Monthly returns have been filed in respect of the periods in question. The stand taken by the petitioner therein for arriving at the turnover is based on purchases effected. This is an accepted modus operandi for arriving at the turnover in the cases of civil works contractors, since several projects would run simultaneously for different periods of time. Hence one of the methods that is accepted both by Industry as well as by the Commercial Taxes Department is to arrive at the turnover based on the purchases made in the relevant period of assessment to which an acceptable Gross Profit (GP) is added.

3. The petitioner''s place of business was subject to inspection by the Enforcement Wing of the Department on 17.07.2015 wherein it was ascertained that the rate of G.P. added was 10 – 11% on the purchases made. The Enforcement Wing was of the opinion that this modus operandi is incorrect and required re-consideration by adding gross profit of the respective years as per Profit and Loss (P&L) accounts and on the basis of the audited financials.

4. To be noted, that the petitioner has, for the purposes of direct taxes, been following the completed contract method in terms of which Gross Profit has appreciated from year to year based on the quantum of work completed for the relevant year and the profit at the end of the contract period offered to tax. For the purpose of direct taxes, however, the petitioner has chosen to follow the methodology for arriving at deemed sales turnover on the basis of a realistic gross profit.

5. This did not find acceptance by the Enforcement Wing of the Department, that was of the view that the gross profit as revealed in the audited profit in the profit and loss account must be adopted for the purposes of sales tax as well. In opining thus, the Commercial Taxes authority appears to have missed the position that, per income-tax, the gross profit was being computed on completed contract method.

6. On the aspect of procedure, a notice was issued on 26.04.2016 proposing a variation to the computation of turnover as noticed in the preceding paragraphs. The petitioner objected by way of reply. Upon change of Officer, a revised second notice was issued on 07.02.2019 to which also, a response was issued. There was yet again a change in Officer and notices were sent on 19.02.2019 and 25.02.2019, to which replies were sent by the petitioner. All three Officers have proceeded on the basis that the rate of GP should be as adopted in the Income-tax proceedings, varying at rates between 19 to 31%.

7. While this is so, and it would have been appropriate for the officer who was third and last in the series of Assessing Officers to hear the petitioner and pass an order, it is the second officer who issued notice on 07.02.2019, who passed the impugned order on 30.12.2019, confirming the pre assessment proposal. It is as against these orders that the petitioner has filed the present batch of writ petitions.

8. The irregularity in procedure followed, the error in the computation of turnover and the fact that the entirety of the impugned order is based on the enforcement proposals, the assessing offi