2015 (6) TMI 193 - HC - VAT and Sales Tax

Input tax credit - respondent has failed to note that the petitioner in inconformity with Section 19(10) (a) of Tamil Nadu Value Added Tax Act of 2006 and Rule 10(2) - Held that - Petitioner has submitted all the necessary details, more particularly the information such as Registration Certificate Numbers under the TNVAT Act of the sellers and dealers. Therefore, when the petitioner has initially discharged his burden as per Section 19(10)(a) of the TNVAT Act, showing that the goods have been subjected to tax at an earlier stage, the respondent ought to have considered the same. Although he is liable to apply his mind, without doing so, by merely resorting to the alleged demand made by the petitioner before the Enforcement Officer, Enforcement Wing. With regard to the proposal of reversal of Input Tax Credit, over ruling all the objections, without giving any other reasons, has wrongly come to the conclusion - the impugned orders are set aside, as the Assessment Orders are passed without considering the objections and by merely taking note of the proposal of the Enforcement Officer. - Decided in favour of assessee.

Summary

Issues involved:
Challenge to impugned orders passed by Assessment Officer regarding input tax credit under Tamil Nadu Value Added Tax Act of 2006.

Analysis:
The petitioner challenged the impugned orders passed by the Assessment Officer, arguing that they have provided all necessary documents and information for claiming input tax credit as per Section 19(10)(a) of the Tamil Nadu Value Added Tax Act. The petitioner contended that despite furnishing all details while filing returns, the respondent repeatedly requested the same particulars, indicating a lack of application of mind. The petitioner emphasized that they have discharged the initial burden by providing required details like purchaser and supplier's registration numbers and original invoices. The petitioner criticized the respondent for ignoring these aspects and relying solely on an alleged proposal of reversal of input tax credit without proper examination, which was deemed premature by the court. The court referred to a previous case where a similar approach was disapproved, emphasizing the need for the Assessing Officer to consider objections in detail before passing an order.

The Additional Government Pleader representing the respondent acknowledged the infirmity in the impugned order in light of the court's previous judgment, offering no defense for the respondent's actions. The court noted that the petitioner had submitted all necessary details, including registration certificate numbers under the TNVAT Act, to show that goods were taxed at an earlier stage, fulfilling the requirements of Section 19(10)(a) of the Act. The court criticized the respondent for not considering these details and instead relying on an alleged demand made before the Enforcement Wing, leading to a flawed conclusion. The court reiterated the importance of the Assessing Officer independently evaluating objections and providing valid reasons for their decisions, rather than merely accepting proposals without proper scrutiny.

Based on the above analysis, the court set aside the impugned orders, stating that they were passed without due consideration of objections and solely based on the proposal of the Enforcement Officer. The court directed the Assessing Officer to reconsider each objection raised by the petitioners, providing reasons for their decisions based on the material available and the petitioners' accounts. The matters were remanded back to the Assessment Officer for reassessment in accordance with the law, and all writ petitions were allowed, with no order as to costs.