2016 (6) TMI 1420 - HC - VAT and Sales Tax

Validity of assessment order - higher amount on excess of ₹ 50 lakhs only - notification issued under Section 3 (4) of the TNVAT Act and G.O.Ms.No.135, dated 30.10.2011 to be taken into account - HELD THAT - The Respondent should have taken into consideration the notification issued under Section 3 (4) of the TNVAT Act and G.O.Ms.No.135, dated 30.10.2011, which is effective from 01.04.2012, and the petitioner has to pay higher tax only for the excess amount of ₹ 32,228/-, which is more than ₹ 50 lakhs limit and as per the Government Order and the amendments to Section 3 (4) of the Act, the petitioner is entitled to avail Input Tax Credit for the turnover, which exceeds ₹ 50 lakhs and the said Government Order, being a beneficiary notification, is applicable to the year 2012-13 also. This Court is of the view that the respondent should be directed to redo the entire assessment, taking into consideration the submissions made by the petitioner and take a decision after affording an opportunity of personal hearing - Petition allowed by way of remand.

Summary

Issues:
Assessment under Tamil Nadu Value Added Tax Act, 2006 for crossing taxable turnover limit.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, received a notice for crossing the taxable turnover limit for a specific year and was directed to pay tax at 14.5%. The petitioner claimed to be availing a compounding scheme and objected to the assessment, citing entitlement to Input Tax Credit for the excess turnover. The petitioner argued that a government order and amendments allowed for such benefits. However, the respondent proceeded with the assessment, stating no objection was received from the petitioner. The court noted the petitioner's contentions and directed the respondent to reconsider the assessment, emphasizing the need to consider the petitioner's submissions and provide a personal hearing opportunity.

The court held that the respondent must redo the assessment, considering the petitioner's objections and providing a fair opportunity for a personal hearing. The judgment allowed the writ petition, setting aside the assessment order and remanding the matter back to the respondent for fresh consideration. The petitioner was instructed to submit objections within two weeks, after which the respondent would conduct a proper assessment in compliance with the law. No costs were awarded in this matter, and the related miscellaneous petition was closed.