2017 (11) TMI 739 - HC - VAT and Sales Tax

Validity of assessment order - reversal of input tax credit - Effect of substitution of a provision in the Statute - Held that - this contention cannot be raised before this Court for the first time, as the petitioner failed to raise the same before the Assessing Officer. In an assessment proceedings, it is always open to the petitioner to raise all the issues, both factual and legal. The petitioner failed to do so. Taking note of the fact that the petitioner is a small dealer, this Court is inclined to give one more opportunity to the petitioner, however, subject to a condition that petitioner is directed to pay 15% of the disputed tax within a period of three weeks from the date of receipt of a copy of this order - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order under Tamil Nadu Value Added Tax Act, 2006 for the year 2014-15. Interpretation of Section 19(2)(v) of the Act. Failure to exhaust appeal remedy and respond to revision notice. Effect of substitution of a provision in the statute on input tax credit.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged an assessment order for the year 2014-15. The court noted that the petitioner did not appeal the order before the First Appellate Authority, rendering the appeal time-barred. Additionally, the petitioner failed to respond to a revision notice, leading to the assessment. The court held that the respondent was not at fault in completing the assessment in this manner due to the petitioner's inaction.

The petitioner raised legal submissions regarding Section 19(2)(v) of the Act, arguing that the substitution of the provision affected the input tax credit reversal. Reference was made to a previous judgment to support the argument that substitution takes effect from the inception. However, the court found that such contentions should have been raised before the Assessing Officer during the assessment proceedings. Notably, a previous decision had held Section 19(2)(v) unconstitutional, leading to a stay order on the judgment pending appeal.

Considering the circumstances and the petitioner being a small dealer, the court granted one more opportunity to the petitioner. The court directed the petitioner to pay 15% of the disputed tax within three weeks. Upon compliance, the petitioner could treat the impugned order as a show cause notice, submit objections within seven days, and receive a personal hearing for reassessment. Failure to meet the payment condition would nullify the benefits of the order. The judgment was delivered without costs, and the related Writ Miscellaneous Petition was closed.