2018 (4) TMI 1902 - HC - VAT and Sales Tax

Refund of excess Input Tax Credit (ITC) - when the request for refund was being under consideration, the Writ Petition has been filed - HELD THAT - The petitioner has to necessarily submit their reply/objections to the show cause notice and contest the matter before the respondent, as there is no order passed by the respondent, rejecting the claim of refund made by the petitioner. The Writ Petition is disposed of, by directing the petitioner to submit their reply to the show cause notice, dated 05.02.2018, within 15 days from the date of receipt of a copy of this order, and on receipt of the reply, the respondent shall afford an opportunity of personal hearing to the Authorized Representative of the petitioner and pass a speaking order on merits and in accordance with law.

Summary

Issues:
1. Petitioner seeking a Writ of Mandamus for refund of excess Input Tax Credit (ITC) under TNVAT Act, 2006.
2. Jurisdiction of respondent to retain excess ITC claimed for refund.
3. Counter affidavit filed by respondent proposing recovery of ITC amount.
4. Necessity for petitioner to reply to show cause notice and contest the matter before the respondent.

Analysis:
1. The petitioner sought a Writ of Mandamus for the refund of a sum related to assessment years 2010-11 to 2015-16 under the TNVAT Act, 2006. The counsel argued that the petitioner is entitled to the refund of excess ITC as per the TNVAT Act and Rules, emphasizing that the respondent has no jurisdiction to retain the excess ITC if the claim is not rejected and if the eligibility for refund is established through the monthly returns filed.

2. The respondent, in response to the Writ Petition, contended that the claimed amount is not due for refund and proposed recovery of a different amount from the petitioner. The respondent issued a show cause notice for the proposed recovery, which the petitioner received. The court noted that since there was no rejection of the refund claim by the respondent, the petitioner must reply to the show cause notice and contest the matter before the respondent to address the issue effectively.

3. Given the factual background and the contentions of both parties, the court disposed of the Writ Petition by directing the petitioner to submit a reply to the show cause notice within 15 days. The respondent was instructed to provide an opportunity for a personal hearing to the petitioner's Authorized Representative and to pass a detailed order on merits and in accordance with the law. The court emphasized that the petitioner can raise all factual and legal contentions in the reply to be submitted, ensuring a fair process.

4. The judgment concluded without imposing any costs on either party, and the connected Writ Miscellaneous Petition was closed. The detailed order and the need for the petitioner to actively engage in responding to the show cause notice were highlighted, emphasizing the importance of following the due process and presenting all relevant arguments before the respondent for a fair resolution of the refund issue.