2016 (12) TMI 632 - HC - VAT and Sales Tax

Input tax credit - Cross-verification / invoice wise mismatch - principles of natural justice - Held that - the respondent, has selectively referred to certain portions of the petitioner s objections and has not dealt with the entire objections, did not furnish the documents sought for, did not afford an opportunity of personal hearing to the petitioner and did not deal with the applicability or otherwise of the decisions referred to by the petitioner, but proceeded on a ground that there was no document filed by the petitioner to substantiate the movement of the goods for confirmation of the purchase made from local registered dealers. Thus, it is clear that the respondent has misdirected himself in completing the assessments and the manner, in which, the assessments have been completed, is not tenable. The writ petitions are partly allowed, the impugned orders are set aside in so far as the finding rendered by the respondent with regard to cross verification (invoice wise mismatch) and the matters are remanded back to the respondent for fresh consideration.

Summary

Issues:
Challenge to assessment orders for the years 2010-11 to 2014-15 regarding liability of cross verification (invoice wise mismatch).

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged assessment orders based on cross verification of purchases. The Court noted a violation of natural justice principles and decided to dispose of the main writ petitions. The notices issued to the petitioner highlighted a mismatch in input tax credit claims after a VAT audit. The petitioner responded with objections, citing compliance with tax rules and presenting original purchase bills. They also referenced previous court decisions to support their claim against reversing input tax credit. However, the respondent did not address all objections, failed to provide requested details, and did not conduct a personal hearing. The Court found the assessments flawed and interfered with the orders.

The Court partially allowed the writ petitions, setting aside the findings on cross verification mismatch and remanding the matters for fresh consideration. The respondent was directed to provide dealer details for reconciliation, after which the petitioner could file objections within 15 days. A personal hearing was mandated, and the respondent was instructed to pass a reasoned order based on the documents presented. The Court closed the case without costs, emphasizing the need for a fair and lawful assessment process.