2016 (12) TMI 189 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act, 2006 - Held that - Considering the fact that the assessments are being reopened with retrospective effect from 2009-10 onwards and the petitioner s specific plea is that the manufacture of detergent powder commenced only from October 2014 and that they have sufficient documents to substantiate production, this Court is of the view that one indulgence can be shown to the petitioner to prove the above stand before the Assessing Officer. However, for such purpose, this Court is not inclined to quash the impugned assessment orders. The petitioner can be permitted to file a petition under Section 84 of the said Act and produce necessary documents in support of their contentions, which shall be examined by the first respondent - the writ petitions are disposed of by directing the petitioner to file petitions under Sections 84 of the said Act within a period of two weeks - appeal disposed off by way of remand.

Summary

Issues:
Challenging assessment orders under Tamil Nadu Value Added Tax Act, 2006 for the years 2009-10 to 2014-15.

Analysis:
The petitioner, a trader in acids and chemicals, challenged assessment orders passed by the first respondent under the Tamil Nadu Value Added Tax Act for the years 2009-10 to 2014-15. The petitioner sought an opportunity to present relevant documents before the Assessing Officer to substantiate their case, as certain documents were not produced initially. The first respondent alleged that the petitioner sold detergents instead of chemicals, leading to a proposal to reopen assessments and apply a higher rate of tax. The petitioner claimed to have started production in October 2014 after purchasing machinery in August 2014 and receiving a power connection in October 2014. Despite the petitioner's assertions in their reply, they did not provide documents to support their claims. The Assessing Officer did not request substantial evidence from the petitioner regarding the commencement of production, resulting in assessments at a higher tax rate for the period in question.

The Court acknowledged the petitioner's plea that production of detergent powder began in October 2014 and that they possessed sufficient documents to prove it. The Court decided not to quash the assessment orders but allowed the petitioner to file petitions under Section 84 of the Act to present supporting documents for their contentions. The first respondent would then examine the documents, provide a personal hearing opportunity, and issue a speaking order based on the merits and the law. The Court directed the petitioner to file the petitions within two weeks, and until the first respondent passed new orders, no coercive tax recovery actions were permitted. The judgment concluded by closing the writ petitions without imposing any costs.