2016 (12) TMI 8 - HC - VAT and Sales Tax

Input tax credit - registration number of suppliers cancelled - Held that - the question would be as to why the then Assessing Officer did not proceed further pursuant to the notices dated 09.03.2012. Since no action was taken pursuant to the notice dated 09.03.2012, it is prima facie clear that the then Assessing Officer was satisfied with the petitioner s explanation dated 25.03.2012 supported by the letter given by M/s.Super Flames dated 02.04.2012. Thus, the respondent should objectively assessed the entire situation and then come to a conclusion. For the above reasons, this Court is of the view that the matter should be send back to the respondent for re-consideration - petition allowed by way of remand.

Summary

Issues:
Assessment orders for 2010-11 and 2011-12 under TNVAT Act challenged by registered dealer supplying food and drinks. Discrepancies in purchases from canceled registration certificate holders M/s.Super Flames and M/s.Deepak Agencies. New Assessing Officer proposes reversing Input Tax Credit. Petitioner's explanations and evidence not considered adequately in impugned orders. Lack of verification and denial of opportunity for personal hearing. Previous Assessing Officer's satisfaction with petitioner's explanations not considered.

Analysis:
The petitioner, a registered dealer under TNVAT Act, challenged assessment orders for 2010-11 and 2011-12 due to discrepancies in purchases from M/s.Super Flames and M/s.Deepak Agencies, whose registration certificates were canceled. The new Assessing Officer proposed reversing Input Tax Credit, disregarding petitioner's explanations and evidence. The petitioner's reply reiterated that M/s.Super Flames had a new TIN number and was still a registered dealer. However, the respondent's impugned orders did not adequately address the petitioner's submissions and failed to verify the facts before passing judgment.

The Court noted that the respondent did not reject the petitioner's explanations but overruled objections based on insufficient documentation. The respondent denied the petitioner an opportunity to submit further documents or have a personal hearing. The Court criticized the lack of verification by the respondent and highlighted the need for a more thorough assessment before passing orders. The Court also questioned why the previous Assessing Officer did not take further action after the petitioner's explanations in 2012, indicating satisfaction with the petitioner's stand.

Consequently, the Court directed the matter to be sent back to the respondent for reconsideration. The petitioner was instructed to treat the impugned proceedings as a show cause notice, allowing 30 days to submit detailed objections supported by records. The respondent was ordered to provide a personal hearing, verify facts with the Commercial Tax Officer, and re-do the assessment in accordance with the law. The Court emphasized the importance of a fair and thorough assessment process, highlighting the need for proper verification and consideration of all relevant evidence.