2019 (12) TMI 1682 - HC - VAT and Sales Tax

Acceptance of methodology of payment of taxes on deemed sale value u/s 5 of Tamil Nadu Value Added Tax Act, 2006. The argument advanced on behalf of the petitioner is that the method of accounting decided upon and fixed on the direction of the Tax Audit Officers at the time of inspection on 17.07.2009 is being followed consistently by it till date. HELD THAT - The learned single Judge has directed an assessment to be completed, de novo, including specifically the issue of whether the plea raised by the petitioner in regard to method of accounting is bonafide or otherwise. Thus, there is some merit in the argument that the issue as to whether the method of accounting followed was bonafide or otherwise, should be considered specifically as a preliminary issue particularly, in the light of statement dated 17.07.2009. The impugned order is set aside - the petitioner is directed to appear before the Assessing Authority on Friday the 20 th December, 2019 at 10.30 a.m. without expecting any further notice in that regard - the writ petition disposed off.

Summary

Issues Involved:
The petitioner seeks a mandamus directing the respondent to accept the methodology of payment of taxes on deemed sale value u/s 5 of Tamil Nadu Value Added Tax Act, 2006, for the period 2009-2010 to 2012-2013. The petitioner contends that the method of accounting decided upon and fixed on the direction of the Tax Audit Officers is being consistently followed.

Details of the Judgment:

1. The petitioner had earlier been involved in litigation regarding the assessment orders for the same years. A learned single Judge directed that upon remitting 15% of disputed taxes, the impugned orders of assessment should be taken as show cause notices for the petitioner to submit objections. The petitioner had requested the respondent to consider certain statements recorded by the Enforcement Wing, which were not addressed during the assessment process. The petitioner had reverted back to an old method of filing returns after 01.04.2013, leading to the current issue for the period from 2009-2013.

2. Pursuant to the previous order, there was an exchange of notices and written submissions, culminating in a final notice calling upon the petitioner to appear with objections and evidences for a personal hearing. The petitioner maintained that the accounting method followed since 17.07.2009 was in line with the Department's direction and should not be deviated from.

3. The learned single Judge had directed a de novo assessment, specifically addressing the bonafide nature of the petitioner's accounting method. It was deemed necessary to consider whether the method of accounting was bonafide, especially in light of the statement dated 17.07.2009.

4. Consequently, the impugned orders were set aside, and the writ petitions were disposed of by directing the petitioner to appear before the Assessing Authority without further notice. The petitioner would be heard on all assessment issues, particularly focusing on the bonafide nature of the accounting method. The assessment order was to be passed within six weeks from the conclusion of the personal hearing. No costs were awarded in this matter.