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IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mohammed Shaffiq, J.
M/s.A.J.Steels - Petitioner
Versus
The State Tax Officer, Group-IV, Inspection-II, Intelligence-II and ors. – Respondents
W.P. Nos.6701, 5548, 5555, 5557 and 5566 of 2021 and W.M.P. Nos.6185, 6189, 6193, 7252 and 7253 of 2021
Decided On : 26-06-2024
Judicial Review - Writ Petition - TNGST Act Sections 73, 167 - The court interpreted the provisions of the TNGST Act, particularly regarding the delegation of powers and the adjudication process, affirming the validity of the Circular No.9 of 2019 and the assessment orders.
Fact of the Case:
The petitioner challenged assessment orders for the years 2017-2021 and Circular No.9 of 2019, alleging illegality, lack of jurisdiction, and violation of natural justice following inspections revealing defects in tax claims.
Finding of the Court:
The court found that the Circular No.9 of 2019 was validly issued and that the assessment orders were based on proper authority, rejecting claims of bias and procedural impropriety.
Issues: Whether the Circular No.9 of 2019 was valid and whether the assessment orders were made without jurisdiction or in violation of natural justice.
Ratio Decidendi: The court held that the delegation of powers through a circular was permissible under the TNGST Act and that the challenge based on bias lacked merit, affirming the authority of the inspecting officer to adjudicate.
Result: The writ petitions were dismissed, allowing the petitioners to appeal within four weeks.
ORDER :
Mohammed Shaffiq, J.
PRAYER in W.P.No.6701 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records on the files of the 4th Respondent in Circular No.9 of 2019 dated 24.05.2019 delegating the power for adjudication to be inspection cell falls under Deputy Commissioner inspection unit delegated to Joint Commissioner intelligences and quash the 2nd function adjudication and assessment based on findings during the inspection and quash the same as illegal, invalid and without authority of law and also the principles of administration of justice.
PRAYER in W.P.No.5548 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records of the 1st Respondent proceedings in GSTIN:33AJRPM5224G1Z6/2017-18 dated 19.01.2021 and quash the same being illegal, invalid, without jurisdiction and violated the principles of natural justice and contrary to the law or issue.
PRAYER in W.P.No.5555 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records of the 1st Respondent proceedings in GSTIN:33AJRPM5224G1Z6/2018-19 dated 19.01.2021 and quash the same being illegal, invalid, without jurisdiction and violated the principles of natural justice and contrary to the law or issue.
PRAYER in W.P.No.5557 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records of the 1st Respondent proceedings in GSTIN:33AJRPM5224G1Z6/2019-20 dated 20.01.2021 and quash the same being illegal, invalid, without jurisdiction and violated the principles of natural justice and contrary to the law or issue.
PRAYER in W.P.No.5566 of 2021: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari calling for the records of the 1st Respondent proceedings in GSTIN:33AJRPM5224G1Z6/2020-21 dated 21.01.2021 and quash the same being illegal, invalid, without jurisdiction and violated the principles of natural justice and contrary to the law or issue.
This batch of five writ petitions is filed challenging the assessment orders for the period 2017-18 to 2020-21 and Circular No.9 of 2019 dated 24.05.2019 issued by the 4th Respondent in W.P.No.6701 of 2021.
2. The petitioner is engaged in wholesale and retail trade of M.S.Scraps and other scraps. The petitioner is an assessee under the jurisdiction of the 3rd Respondent herein. There was an inspection of the petitioner's place of business by the 1st Respondent on the basis of the authorisation issued by Joint Commissioner (ST), Intelligence-II, the 2nd Respondent herein. During the course of the inspection, the following defects were noticed which is tabulated hereunder:
| S.No. | Assessment year | Order date | Defects |
| 1 | 2017-18 | 19.01.2021 | i) Ineligible claim of ITC – Regarding inward supplies. |
| ii) Ineligible claim of ITC on vehicles (One Lorry – TN 13 L 0766). | |||
| iii) Interest under Section 50 of the Act. | |||
| iv) Penalty under Section 73(9) of the Act. | |||
| 2 | 2018-19 | 19.01.2021 | i) Ineligible claim of ITC – Regarding inward supplies |
| ii) Interest under Section 50 of the Act. | |||
| iii) Penalty under Section 73(9) of the Act. | |||
| 3 | 2019-20 | 20.01.2021 | i) Ineligible claim of ITC – Regarding inward supplies. |
| ii) Ineligible claim of ITC on vehicles spare parts. | |||
| iii) Interest under Section 50 of the Act. | |||
| iv) Penalty under Section 73(9) of the Act. | |||
| 4 | 2020-21 | 21.01.2021 | i) Stock Reconciliation |
| ii) Ineligible claim of ITC on vehicle spare parts. | |||
| iii) Penalty under Section 73(9) of the Act. |
3. Pursuant thereto, on the basis of the defects noticed during the course of inspection, the 1st Respondent initiated the proceedings under Section 73 of the Ta
AI
The court established that delegation of adjudicatory powers via circulars is valid under the TNGST Act, and challenges based on bias must be substantiated with evidence.
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