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2017 (2) TMI 1156 - HC - VAT and Sales TaxITC - Penalty - Rectification Petition - Held that - the petitioner indicated that other material, in the form of original tax invoices issued by the dealers and ledger extract of the suppliers, were available, to substantiate its claim, notwithstanding the fact that the commodity code had not been mentioned. In so far as the tax imposed qua sale of tangible assets was concerned, it was indicated that the assets worth ₹ 5,78,98,000/- were disposed of by its registered office in Bangalore (now Bengaluru) and, therefore, the applicable tax had been paid under Karnataka Value Added Tax Act. As regards the sale made to SEZ Units/developers was concerned, it was claimed that exemption was sought under G.O.Ms.No.193 dated 30.12.2006. The petitioner attempted to dispel the impression gathered by respondent No.1 that the petitioner was seeking to take benefit under Section 18 of the 2006 Act. There was an apparent error made with respect to the adjustment of TDS, the impugned order needed to be recalled and, accordingly, an opportunity could have been given to the petitioner to place the relevant material on record qua other issues as well - Matter remanded back to redo the assessment.
Issues:
Challenge to assessment orders under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 for the Assessment Year 2012-13. Analysis: The petitioner executed works contract for construction of commercial complexes in the Special Economic Zone (SEZ) in Tamil Nadu, claiming exemption under G.O.Ms.No.193 dated 30.12.2006 instead of zero rating under Section 18 of the 2006 Act. Respondent No.1 issued a pre-assessment notice, but the petitioner claimed it was never served. Despite objections raised by the petitioner, respondent No.1 passed an assessment order adding a substantial amount to the taxable turnover due to various reasons, including disallowance of Input Tax Credit, incorrect tax rates applied, and denial of exemption for sales to SEZ developers. The petitioner also disputed the treatment of tangible assets and non-accounting of Tax Deducted at Source (TDS) in the assessment. The petitioner filed a rectification petition under Section 84 of the 2006 Act, challenging the errors in the assessment. However, respondent No.1 summarily dismissed the petition citing no apparent error on the face of the record. The High Court noted several errors in the assessment, including the failure to account for TDS and the misinterpretation of the petitioner's claims regarding sales to SEZ developers. The Court directed the petitioner to deposit a certain amount to show bonafides, and upon agreement, set aside the assessment orders, allowing respondent No.1 to redo the assessment. The petitioner was instructed to appear before respondent No.1 with all relevant documents, and respondent No.1 was directed to pass a fresh speaking order within a specified timeframe. In conclusion, the High Court disposed of the writ petitions, ordering the petitioner to deposit a specific amount and allowing respondent No.1 to reassess the case. The Court emphasized the need for a fair assessment process and set a deadline for the completion of the reassessment. No costs were awarded in the judgment, and the connected Miscellaneous Petitions were closed.
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