2019 (3) TMI 1617 - HC - VAT and Sales Tax

Levy of penalty u/s 27 (3) of TNVAT Act - additions in the impugned order are based wholly on the data from the intranet website in respect of which no opportunity has been granted to the petitioner - entire tax had been paid in full and what remains is only the penalty due - HELD THAT - This Court in the case of J.K.M.Graphics Solutions Pvt. Ltd., Vs. C.T.O., Vepery Assessment Circle, Chennai 2017 (3) TMI 536 - MADRAS HIGH COURT considered the veracity of notices/assessments that had been framed solely on the basis of data obtained from the website of the Commercial Taxes Department. The Court has set aside the impugned notices/orders and remanded the matters to the respective Assessing Officers, to undertake assessment afresh after conducting thorough enquiry. A direction has also been given to the Commercial Tax Department to evolve a centralized mechanism to exclusively deal with cases of mismatch based on web data. There being no dispute that the issue on merits is covered by the order of this Court in J.K.M.Graphics and also the fact that the petitioner paid the entire tax as well as penalty and in the interests of justice, the impugned order is set aside and the Assessing authority is directed to take the proceedings denovo and in accordance with law, after affording an opportunity of hearing to the petitioner - Petition allowed by way of remand.

Summary

Issues:
Challenging penalty imposition under Section 27(3) of the Act based on data from intranet website without granting opportunity to the petitioner.

Analysis:
The Writ Petition faced substantial laches, but the additions in the impugned order were solely based on data from the intranet website without providing an opportunity to the petitioner. The petitioner had paid the entire tax, leaving only the penalty due.

The Court had directed the petitioner to remit the penalty amount, which was confirmed by the counsel for both parties. With their consent, the matter was taken up for final disposal.

Referring to a previous case, the Court highlighted the need for a centralized mechanism to handle cases of mismatch based on web data. Although the mechanism was in the process of formulation, a circular was issued to keep assessment proceedings alive until its full implementation.

Considering the previous judgment and the petitioner's compliance with tax and penalty payments, the impugned order was set aside. The Assessing authority was directed to conduct proceedings de novo, ensuring a fair hearing for the petitioner.

Consequently, the Writ Petitions were disposed of with no costs, and connected Miscellaneous Petitions were closed.