2017 (7) TMI 468 - HC - VAT and Sales Tax

Extension of time to file objection - Input tax credit - capital goods - penalty - Held that - the onus is on the petitioner to establish that these goods are capital goods and the petitioner is entitled for input tax credit on the same - After having fixed the date for personal hearing and filing the objection, the petitioner was not justified in seeking for two months further time. Therefore, this Court is satisfied that this is not a case, where there is violation of principles of natural justice, but a case, where the petitioner failed to avail the opportunity granted to him. Therefore, this Court is not inclined to set aside the impugned assessment orders - if one more opportunity is granted to the petitioner to establish their case before the Assessing Officer, they will be able to produce the documents and other proof to show that the goods qualify for availment of input tax credit, this Court is inclined to grant one more opportunity, but subject to certain conditions - petition allowed.

Summary

Issues:
Challenge to assessment orders disallowing input tax credit on capital goods and penalty imposed.

Analysis:
The petitioner, a Registered Dealer under TNVAT Act and CST Act, challenged assessment orders for the years 2011-12 to 2015-16, disputing the disallowance of input tax credit on capital goods and the penalty imposed. Various objections were raised during a tax audit, including belated payments, ITC reversals, non-filing of forms, and ineligible ITC claims. The authorized representative admitted liability for most objections but contested the denial of input tax credit on capital goods amounting to ?16,75,168. The petitioner failed to submit objections or attend a personal hearing despite multiple opportunities, leading to the completion of the assessment by the respondent.

The petitioner claimed that the disputed goods qualified as capital goods under the TNVAT Act, but the court emphasized that the onus was on the petitioner to prove this before the Assessing Officer. As the petitioner did not establish this fact during the audit proceedings, the court deemed it inappropriate to address this factual contention in a Writ Petition without prior substantiation.

Acknowledging the petitioner's request for another opportunity to present evidence supporting their claim for input tax credit on capital goods, the court granted a conditional opportunity. The petitioner was directed to pay ?5,00,000 to the respondent within 15 days. Upon payment, the petitioner could treat the assessment order as a show cause notice, submit objections within seven days, and receive a personal hearing for reassessment within 30 days. Failure to comply with the payment condition would result in the dismissal of the Writ Petition without further recourse to the court.

In conclusion, the court disposed of the writ petition, allowing for a conditional opportunity for the petitioner to substantiate their claim for input tax credit on capital goods, subject to the specified payment and procedural requirements.