NE NEWS SERVICE
CHENNAI, MARCH 29
Holding that it is not a fit case, the first bench of the Madras High Court has directed the Tamil Nadu State Marketing Corporation (TASMAC) to approach the Appellate authority to challenge the re-assessment order issued by the Income Tax department for assessment year 2015-16.
The bench was disposing of a writ petition from TASMAC seeking to quash the impugned assessment order dated September 28, 2021 for the assessment year 2015-16, recently.
State-run TASMAC handles the wholesale supply of Indian-made foreign liquor in Tamil Nadu.
“We do not find this as a fit case for maintaining a writ petition to challenge the assessment order. However, the petitioner can seek remedy by filing an appeal against the assessment order because, we have not touched the merits of the issue. Rather, the present order is only with reference to the maintainability of the writ petition in reference to the notice under Section 148 of the Income Tax Act and the objections thereupon,” the bench of Chief Justice M N Bhandari and Justice D Bharatha Chakravarthy said.
The bench noted when TASMAC counsel prayed the court to grant liberty to file an appeal against the assessment order within three weeks, there was no objection raised by the IT counsel. Accordingly, the petitioner is at liberty to file an appeal before the appellate authority against the assessment order within three weeks and if it is filed, the appeal shall be entertained after applying the provisions of law.
However, taking note of the peculiarity of the case, the department shall not take any coercive action against TASMAC till the disposal of the appeal, the bench said and directed the appellate authority to expedite the hearing and decide the appeal at the earliest so that the position in reference to the legal issue regarding the acceptance of VAT towards expenditure on the income may become clear as to whether it is allowable or not.
“This order shall not be taken as a precedent, as it is passed after taking note of the peculiar facts of the present case only,” the bench added.
Earlier, petitioner’s counsel submitted the writ petition challenging the assessment order is maintainable for the reason that after the notice under Section 148 of the Income Tax Act, 1961, TASMAC submitted the objections. However, without deciding the objections, the department had issued another show cause notice pursuant to the amendment made in the Act of 1961 in the intervening period. The assessment order could not have been passed without deciding the objections raised by petitioner.
As there was a procedural lapse and irregularity in passing the re-assessment order, the writ petition was maintainable. He also made a specific reference to a judgment of the Supreme Court, which indicated that in cases where objections were submitted by the assessee pursuant to the notice under Section 148, the assessing officer was bound to dispose of the same by passing a speaking order before proceeding with the assessment order
