2016 (10) TMI 940 - HC - VAT and Sales Tax

Entitlement for deduction u/r 8(5) of the Act - production of Form-S Certificate - unless and until the Department produce the Form-S Certificate, petitioner cannot do so - the dealers with whom petitioners had transactions are all reputed dealers, who are registered before the various Assessment Circles in Chennai District and they are regularly filing their monthly returns and paying taxes - when section 13 of the Act has been held to be only procedural and Section 5 of the Act being the charging section for levy of tax on deemed sale of works contract, failure to discharge the alleged procedure under section 13 of the Act does not give a jurisdiction to the respondent to invoke its revisional powers under section 27 of the Act, moreso, when the sub-contractor had filed their return and paid tax under section 5 of the Act and the petitioner is entitled for deduction under Rule 8(5) of the Act. Completion of assessment solely on the instructions of the Audit Wing - Held that - this should not be the sole reason for confirming the D-3 proposal and complete the assessment Held that - matter is remanded to the respondent to conduct a thorough verification of the details through their official channel, as to the stand taken by the petitioner stating that all the contractors are registered dealers as on date and they have been regularly filing returns before their respective Assessing Officer and paying the tax, after due verification, the respondent shall afford an opportunity of personal hearing to the petitioner and redo the assessments in accordance with law - petition disposed off - matter on remand.

Summary

Issues:
Challenge to assessment orders under TNVAT Act for assessment years 2007-08 to 2012-13 based on non-production of Form-S Certificate.

Analysis:
The main issue in the case was whether the respondent could pass the assessment orders solely due to the petitioner's failure to produce the Form-S Certificate. The petitioner argued that they were unable to provide the certificate as the department had not produced it, and requested the Assessing Officer to verify details through official channels. They contended that the respondent should not solely rely on the D-3 proposal and must independently apply their mind. The petitioner also highlighted that failure to comply with procedural requirements under section 13 of the Act does not give the respondent jurisdiction to invoke revisional powers under section 27, especially when sub-contractors had filed returns and paid taxes under section 5 of the Act, and the petitioner was entitled to deductions under Rule 8(5).

The court noted that the Assessing Officer had followed instructions from the Audit Wing, but this alone should not be the basis for confirming the D-3 proposal and completing the assessment. The court opined that the Assessing Officer needed to redo the assessment after conducting proper verification through official channels. Despite several adjournments to clarify the petitioner's inability to obtain the Form-S Certificate, specific instructions were not provided to the Additional Government Pleader. However, considering the circumstances, the court directed the respondent to conduct thorough verification of details through official channels, especially regarding the petitioner's claim that all contractors were registered dealers regularly filing returns and paying taxes. The court ordered the respondent to afford the petitioner a personal hearing and redo the assessments in accordance with the law.

In conclusion, the Writ Petitions were allowed, the impugned orders were set aside, and the matter was remanded to the respondent for thorough verification and reassessment. The respondent was instructed to verify the petitioner's claims, provide a personal hearing, and redo the assessments following due process. No costs were awarded, and connected Miscellaneous Petitions were closed.