1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 01-11-2011 CORAM: THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN W.P.(MD)No.9207 of 2011 and M.P.(MD) No.1 of 2011 Tvl Sahayamatha Salterns P. Ltd., Represented by its Managing Director Thiru Micheal Motha, 100, South Cotton Road, Tuticorin. .. Petitioner Vs. 1.The Commercial Tax Officer (Addl.)-II, Tuticorin, Tuticorin District. 2.The Commissioner of Commercial Taxes, Elilagam, Chepauk, Chennai-600 005. 3.Joint Commissioner (C.T.), Commercial Taxes Buildings, Reserve Line Road, Palayamkottai, Tirunelveli. .. Respondents Writ Petition filed under Article 226 of the Constitution of India, praying for the issue of a Writ of Certiorari, calling for the records relating to the revision notice issued by the first respondent in his pre-assessment Revised Notice Assessment TNGST 5840170/2006-07 dated 25.2.2011 received on 3.3.2011 and quash the same. For Petitioner : Mr.Md. Ibrahim Ali for Mr.A.S.Mujibur Rahman For Respondents : Mr.R.Karthikeyan, Addl. Government Pleader O R D E R The petitioner has come up with the above writ petition, challenging a pre-assessment notice issued by the first respondent herein. 2. I have heard Mr.Md.Ibrahim Ali, learned counsel for the petitioner and Mr.R.Karthikeyan, learned Additional Government Pleader for the respondents. https://hcservices.ecourts.gov.in/hcservices/ 2 3. The petitioner reported a total and taxable turnover of Rs.3,98,17,871/- and Rs.15,98,703/- respectively, claiming exemption on a turnover of Rs.3,82,19,168/-, as per the A-1 monthly returns filed for the period April 2006 to December 2006, under the TNGST Act, 1959. After perusing the monthly returns, the first respondent issued a pre-assessment notice dated 25.2.2011 proposing to disallow the claim of exemption on the sales of salt and proposing to treat the sale of salt as intended for industrial purposes attracting tax. Challenging the said pre-assessment notice, the petitioner is before this Court. 4. The challenge to the pre-assessment notice is primarily on two grounds viz., (i) that under Section 87-A of the TNVAT Act, 2008, the first respondent is obliged to complete the assessment for the period from 1st April 2006 to 31st December 2006 on the basis of the returns filed; and (ii) that the same position has also been directed to be followed, by a Circular dated 25.3.2011 issued by the Commissioner of Commercial Taxes. 5. Section 87-A of TNVAT Act, prescribes that notwithstanding anything contained in that Act, the assessment of a dealer under the TNGST Act or under the Tamil Nadu Additional Sales Tax Act, in respect of the period from 1.4.2006 to 31.12.2006 should be on the basis of the return filed by him. Though it may be open to the Assessing Officer to revise the assessment later, the returns filed should first be accepted and assessment completed. Therefore, it is contended by the petitioner that a pre-assessment notice is contrary to Section 87-A. 6. But a plain reading of Section 87-A does not give an indication that an Assessing Authority is divested of any power to issue a pre-assessment notice. All that Section 87-A says is that the Assessing Authority may complete the assessment on the basis of the return filed by the Assessee, in respect of the period stipulated above. It is no doubt true that Section 87-A is a special provision intended to take care of the period of transition from Sales Tax regime to VAT regime. But Section 87-A does not state in express terms that the Assessing Authority shall have no option except to accept the returns and complete the assessments. As a matter of fact, the last line of Section 87-A states as follows:- ".......... such return shall be accepted in accordance with the Rules as may be prescribed." 7. When Section 87 itself states that the returns shall be accepted in accordance with the Rules, it would indicate that all powers as are available to the Assessing Authority under the Rules, to scrutinise the returns, are retained intact by Section 87-A. Section 87-A, therefore is an enabling provision. It merely enables an Assessing Authority to accept the returns without questioning the same. But it does not compel the Assessing Authority to accept any return filed by an Assessee, unconditionally and unequivocally without raising a little finger. Therefore, the first contention based on Section 87-A cannot be accepted. https://hcservices.ecourts.gov.in/hcservices/ 3 8. However, the Commissioner of Commercial Taxes has issued a Circular dated 25.3.2011. This Circular mandates all Assessing Officers to complete the assessment for this period of transition without much ado, so that the transition to the VAT regime is made smooth. The instructions issued by the Commissioner of Commercial Taxes, are in the nature of clarifications issued under Section 28-A (2) of the TNGST Act, 1959. Therefore, by virtue of sub-section (3) of Section 28-A, these instructions are binding on the first respondent. 9. In view of the above, the writ petition is allowed, the impugned order is set aside and the first respondent is directed to complete the assessment for the period in question, within a period of 4 weeks from the date of receipt of a copy of this order. Thereafter, it is open to the first respondent to issue any notice for revision of assessment, if he considers that the petitioner is not entitled to exemption in respect of salt and gypsum. 10. The writ petition is allowed on the above terms. No costs. Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar (T&P) /True Copy/ Sub Assistant Registrar To 1.The Commercial Tax Officer (Addl.)-II, Tuticorin, Tuticorin District. 2.The Commissioner of Commercial Taxes, Elilagam, Chepauk, Chennai-600 005. 3.Joint Commissioner (C.T.), Commercial Taxes Buildings, Reserve Line Road, Palayamkottai, Tirunelveli. +1 CC to Special Government Pleader (SR.No.37536) +1 CC to Mr.S.Mujibur Rahman, Advocate (SR.No.37303) Order in W.P.(MD)No.9207 of 2011 01-11-2011 Svn NSV/4.11.11/3P/6C https://hcservices.ecourts.gov.in/hcservices/