2016 (10) TMI 211 - HC - VAT and Sales Tax

Validity of order of assessment - TNVAT Act, 2006 - denial of input tax credit - Held that - the petitioner though has sought for certain details, the same have not been furnished to the petitioner and the assessments have been completed. Therefore, the Court of the view that the matter can be remanded to the respondent for fresh consideration so as to enable the petitioner to produce proof to show that the dealers with whom they had transactions had valid registration, on the date of transaction. Apart from that, the petitioner can seek for details with regard to cross verification of the buyers and sellers as per Annexure-I and such details can be furnished by the assessing officer and after which, the petitioner can be allowed to submit further objections and assessments can be re-done - writ petition allowed - matter remanded for fresh consideration.

Summary

Issues:
Challenge to assessment orders under TNVAT Act for 2011-12 to 2014-15 based on reversal of input tax credit due to transactions with registration cancelled dealers, discrepancies in purchase turnovers, and lack of details provided by the assessing officer.

Analysis:
The petitioner, a registered dealer under TNVAT Act and Central Sales Tax Act, contested assessment orders for multiple years, citing three grounds for reversing input tax credit related to transactions with dealers whose registrations were cancelled, discrepancies in purchase turnovers, and lack of details provided by the assessing officer. The petitioner argued that the vendors were active dealers at the time of transactions and questioned the reliance on the Department's Intranet website for verification. The High Court observed that despite the petitioner's requests for specific details, the assessing officer did not provide them before completing the assessments. Consequently, the Court decided to remand the matter to the respondent for fresh consideration. The petitioner was instructed to request necessary details from the respondent, demonstrate the validity of dealers' registrations, submit additional objections within two weeks of receiving details, and then the assessments would be redone in compliance with the law.

In conclusion, the writ petitions were allowed, the impugned orders were set aside, and the case was remanded for fresh consideration. The petitioner was directed to seek required details from the respondent, provide proof of valid dealer registrations, submit additional objections within two weeks, and the respondent was tasked with re-doing the assessments in accordance with the law. No costs were awarded, and connected miscellaneous petitions were closed.