2017 (4) TMI 1158 - HC - VAT and Sales Tax

Validity of assessment order - mismatch in the details obtained from the Web report - purchases were made from the dealers, whose registration was cancelled with retrospective effect - Held that - with regard to mismatch is concerned, reliance placed in the case of M/s. JKM Graphics Solutions Private Limited Versus The Commercial Tax Officer 2017 (3) TMI 536 - MADRAS HIGH COURT , where it was held that The problems on account of the mismatch is a Pan India problem and to my mind, the procedure adopted under the Delhi VAT Act regime and the circulars issued under the said Act, appear to be a more transparent system and assessee friendly. This can be borne in mind by the Revenue for necessary follow up action - matter remanded for de novo decision. Retrospective cancellation of registration of dealers - Held that - the Assessing Officer has to find out, as to whether the cancellation of registration was made retrospectively and if so, whether the petitioner can be imposed with tax liability. Therefore, for both purpose the matter has to be remitted back to the Assessing Officer for fresh consideration. Appeal allowed by way of remand.

Summary

Issues:
Challenging assessment orders for years 2010-11 to 2014-15 based on mismatch and retrospective cancellation of dealer registration.

Analysis:
1. Mismatch Issue:
Both parties acknowledged the issue of mismatch was covered by a previous decision. The Court emphasized the need for a centralized mechanism to handle discrepancies efficiently. The Court directed a fresh inquiry by the Assessing Officers in consultation with officers of the other end dealer. It was highlighted that a holistic approach was necessary to bring defaulting dealers to account. The Writ Petitions were allowed, and the matters were remanded for a thorough re-examination.

2. Retrospective Cancellation of Registration Issue:
The Government Advocate acknowledged the need for the Assessing Officer to determine if the cancellation of registration was retrospective and its implications on tax liability. The Court directed the matter to be remitted back to the Assessing Officer for fresh consideration. The Assessing Officer was instructed to follow the guidelines issued in the previous decision for the mismatch issue and consider relevant court judgments. The petitioner was granted a personal hearing before finalizing the assessment.

In conclusion, the Writ Petitions were allowed, and the assessment orders were set aside for both issues. The matters were remitted back to the Assessing Officer for fresh assessment within a specified timeframe. The Assessing Officer was directed to follow the established procedures and guidelines while considering the issues of mismatch and retrospective cancellation of dealer registration. No costs were awarded, and connected miscellaneous petitions were closed.