2017 (8) TMI 140 - HC - VAT and Sales Tax

Reversal of Input Tax Credit - The petitioner s contention is that inspite of earlier direction issued by the Division Bench to examine as to whether the petitioner was issued with certificate of registration within time and whether the petitioner was prevented from filing online returns or manual returns, as the case may be, has not been examined - natural justice - Held that - the respondent in the impugned order has not gone into the aspect as directed by the Division Bench. The petitioner would not be able to file a return electronically as it is admitted by the respondent that the password was given belatedly and for that matter, registration was also done beyond the time limit stipulated under the Act. Whether the petitioner was prevented from filing the manual return? - Held that - There is no definite observation made by the Assessing Officer in this regard. If the petitioner s registration had been delayed, obviously he cannot file a manual return. Above all, the petitioner is not a new dealer, they have taken over an existing business and their vendor had a valid registration with the respondent. Therefore, it is only a transition which required to be done so far as the concerned business. Probably, the verification aspect required to be done was with regard to the solvency of the petitioner and other related requirements. Condonation of delay - Held that - though the registration certificate might have been despatched to the petitioner during April 2014, the petitioner was justified in seeking to file online return as the Department is insisting and compelling dealers to adopt the online procedure and discouraging the filing of manual returns. Therefore, even assuming there is a fault on the part of the dealer in not immediately filing the manual return, on account of the delay by the Department in activating the facility for filing e-return by giving the password, the delay in filing the manual return has to necessarily be condoned. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment order for the year 2013-14 under TNVAT Act, delay in issuance of registration certificate, disallowance of input tax credit, failure to file online returns, non-application of mind by Assessing Officer, necessity of manual returns, repeated approach to the court, statutory remedies, interference with impugned order.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, challenged an assessment order for the year 2013-14. The petitioner acquired a departmental store in February 2014 and applied for registration, receiving the certificate on 10.04.2014. The petitioner claimed that the procedure for issuing the certificate was violated, affecting their ability to file returns electronically and claim input tax credit under Section 19(11) of TNVAT Act. A previous appeal resulted in a remand to the Assessing Officer for fresh findings. The subsequent order dated 23.12.2016 disallowed the input tax credit, prompting the current writ petition.

The petitioner's counsel argued that the impugned order failed to consider the earlier direction to examine the issuance of the registration certificate and the hindrance in filing returns. The respondent contended that the certificate was issued within the prescribed time and highlighted the petitioner's delay in filing manual returns. The petitioner's inertness in filing manual returns and delay in electronic filing were raised as points of contention. The respondent emphasized the need to follow statutory procedures and remedies, citing relevant legal precedents.

The court noted that the Division Bench had directed a fresh finding on the registration certificate and filing hindrances, which the Assessing Officer failed to address in the impugned order. The delay in registration and password issuance prevented the petitioner from electronically filing returns. The court highlighted the Department's role in facilitating online filing and condoned the delay in manual return filing due to the Department's delay in activating the e-return facility. The court concluded that the petitioner should not suffer due to the Department's lapses and interference with the impugned order was warranted.

In conclusion, the court allowed the writ petition, quashed the impugned order, and closed the case without costs.