9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (6) TMI 1287 - HC - VAT and Sales TaxValidity of assessment order - reversal of input tax credit - whether the input tax credit availed by the petitioner could have been directed to be reversed on the grounds assigned by the respondent? - Held that - the answer to the question should be negative , in the light of the decisions of this Court in the case of Althaf Shoes (P) Ltd. Versus Assistant Commissioner (CT) , Valluvarkottam Assessment Circle, Chennai-6 2011 (10) TMI 567 - Madras High Court , where it was held that so long as the purchasing dealer has complied with the requirements as given under rule 10(2), the claim of the purchasing dealer cannot, by any length of reasoning, be denied by the Revenue. The mere fact that the Revenue had not made an assessment on the assessee s vendor, per se, cannot stand in the way of the assessing officer considering the claim of the assessee under section 19 of the Tamil Nadu Value Added Tax Act - petition allowed - decided in favor of petitioner.
Issues:
Challenge to assessment order under Tamil Nadu VAT Act, 2006 regarding input tax credit reversal and penalty imposition. Analysis: The petitioner, a registered dealer under the Tamil Nadu VAT Act, challenged an assessment order dated 27.02.2015, following a notice issued on 01.08.2014 based on an inspection conducted by Enforcement Wing Officials. The inspection revealed discrepancies in the input tax credit claim related to the assessment for the year 2011-12. The respondent contended that the petitioner's claim was ineligible due to the selling dealers not filing returns or reflecting sales to the petitioner, invoking sections 19(6) and 27(4) of the VAT Act. The crucial issue was whether the input tax credit could be reversed based on the respondent's grounds, which, as per established legal precedents, should be answered in the negative. The judgment referenced two significant decisions of the Madras High Court, namely ALTHAF SHOES (P) LTD. v. ASSISTANT COMMISSIONER (CT) and SRI VINAYAGA AGENCIES v. ASSISTANT COMMISSIONER (CT). In the ALTHAF SHOES case, it was held that as long as the vendor is a registered dealer, the claim for refund cannot be rejected, emphasizing the responsibility of the Revenue to take action against non-compliant vendors. Similarly, in the SRI VINAYAGA AGENCIES case, it was established that a dealer complying with Rule 10(2) of the TN VAT Rules could not be penalized for the selling dealer's non-compliance. These decisions underscored the importance of vendor compliance and the protection afforded to purchasing dealers under the VAT Act. The court further referred to the case of INFINITI WHOLESALE LIMITED v. THE ASSISTANT COMMISSIONER (CT), where it reiterated the principles laid down in the earlier cases. The court held that the Assessing Officer's jurisdiction in cases of short reporting of turnover by vendors must not be exercised arbitrarily, emphasizing the need for adherence to established legal positions. Despite repeated judicial clarifications, the Commercial Tax Department failed to apply the law correctly in the instant case, leading to the impugned order being deemed unsustainable in law and set aside. In conclusion, the court allowed the writ petition, setting aside the impugned order and emphasizing the importance of upholding legal principles and ensuring proper application of the law by tax authorities. The judgment highlighted the necessity for Revenue to take action against non-compliant vendors rather than penalizing purchasing dealers who have met their obligations under the VAT Act.
|
