2015 (12) TMI 1383 - HC - VAT and Sales Tax

Levy of tax on TDS - Levy of penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 - Held that - For the assessment year 2009-10 with regard to the dispute relating to TDS, the impugned order came to be passed under Sections 27(3) & 27(4) of the TNVAT Act - as against the order passed under Section 27(3) of the TNVAT adjudicating the dispute which is solely on TDS a revision alone will lie. - instead of entertaining the appeal, the 2nd respondent ought to have returned the papers to the petitioner so as to enable him to represent the papers before the revisional authority - court is inclined to set aside the impugned order - Decided in favour of assessee.

Summary

Issues:
Challenge of order dismissing appeal in VAT regarding levy of tax on TDS and penalty under Section 27(3) of TNVAT Act.

Analysis:
The petitioner, a works contractor and registered dealer under the TNVAT Act, challenged an order dismissing their appeal against the levy of tax on TDS and penalty under Section 27(3) of the Act. The petitioner contended that the appellate authority erred in dismissing the appeal and holding that a revision alone would lie against the order. The petitioner had filed returns promptly for the assessment year in question, and the dispute arose from defects noticed during inspections by the respondent department officials. The 1st respondent issued a pre-revision notice based on an audit report, leading to the levy of tax on TDS and penalty, which was challenged by the petitioner in the appeal to the 2nd respondent.

During the hearing, the petitioner did not press the appeal regarding penalty under Section 27(4) of the TNVAT Act for wrong availment of input tax credit. The impugned order was passed under Sections 27(3) & 27(4) of the TNVAT Act for the assessment year in question. The appellate authority rejected the contentions of the petitioner, stating that a revision alone would lie against the order appealed. The High Court observed that as per the Act, a revision alone would lie against the order passed under Section 27(3) adjudicating the dispute solely on TDS.

The High Court set aside the impugned order of the 2nd respondent to the extent it related to the dismissal of the appeal against the levy of tax on TDS and consequential penalty under Section 27(3) of the TNVAT Act. The Court directed the 2nd respondent to return all papers to the petitioner for representation before the revisional authority within a specified timeframe. The revisional authority was instructed to entertain the representation without reference to the period of limitation and dispose of it within a stipulated time frame. The Court allowed the writ petition, with no costs awarded, and closed the connected matters.