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2015 (3) TMI 1173 - HC - VAT and Sales TaxReversal of Input Tax Credit - Claim made for the purchases from said seller - Violation of principles of natural justice - held that - since the impugned assessment order is only with regard to the reversal of Input Tax Credit, that too, solely based upon the verification with regard to the vendor, the same could not have been done. therefore, by referring the decision of this court in the case of Althaf Shoes (P) Ltd., Vs. Assistant Commissioner (CT) 2011 (10) TMI 567 - Madras High Court and for other reasons, the petitioner is entitled to succeed and accordingly, the impugned order is quashed. No costs. - Decided in favour of petitioner
Issues: Violation of principles of natural justice in assessment order, Contrary to law laid down in a previous case regarding Input Tax Credit claim
In this case, the petitioner, a works contractor and registered dealer under the Tamil Nadu Value Added Tax Act, 2006, challenged an assessment order issued by the respondent based on inspections conducted by the Enforcement Wing. The respondent proposed to revise the assessment and levy a penalty on the petitioner for wrong input tax credit claims. The petitioner submitted a reply along with purchase invoices, but the respondent issued a notice for reversal of the input tax credit claim without calling for the books or considering the petitioner's response. The petitioner contended that the impugned order violated principles of natural justice and cited a previous case where a similar situation was addressed regarding refunds. The court noted that as long as the vendor is a registered dealer, the claim for refund or input tax credit cannot be rejected without taking action against the vendors who did not remit tax to the state. The Additional Government Pleader agreed that the assessment order for the reversal of input tax credit solely based on vendor verification was not valid. Therefore, the court allowed the writ petition, quashed the impugned order, and closed the connected miscellaneous petition without costs.
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