2017 (11) TMI 1028 - HC - VAT and Sales Tax

Revision of return - validity of assessment order - Held that - the petitioner had filed a revised return on 21.12.2015 upto October 2015. Admittedly these revised returns were made much prior to the inspection done by the Enforcement Wing officers which was carried out in the business premises of the petitioner on 29.12.2015 and 30.12.2015. Therefore, the respondent ought to have considered the revised return for the said period. The revised returns filed by the petitioner for November 2015 and December 2015, which was received by the respondent on 01.12.2016, could not have been considered in view of the legal embargo under Section 7(9) r/w.Section 19(11) of the TNVAT Act. What has happened in the present case is that the respondent has taken total purchase from 2010-11 to 2015-16 and assessed the petitioner to tax in a single Assessment year 2015-16. Therefore, to that effect, there is an error in the Assessment Order. Petition dismissed - decided against petitioner.

Summary

Issues:
Challenge to Assessment Order under TNVAT Act for the Assessment Year 2015-16 based on alleged sales suppression and violation of Section 3(4)(a) of the TNVAT Act.

Analysis:
The petitioner, a registered dealer in Electronic Goods, challenged the Assessment Order dated 30.12.2016 for the Assessment Year 2015-16 under the TNVAT Act. The petitioner's business was inspected, revealing a significant difference between purchases and reported sales, leading to allegations of sales suppression and tax collection violations. The Assessing Officer issued a revision notice proposing to revise total turnover, impose penalties, and rejected the petitioner's objections. The petitioner contended that the ratio between purchases and sales was implausible and should not have been clubbed for a single Assessment year. The respondent argued that the assessment was valid, highlighting the alleged tax evasion by the petitioner. The Court noted discrepancies in the Assessment Order, emphasizing that purchases from 2010-11 to 2015-16 should not have been assessed in a single year. However, due to the petitioner's lack of transparency, full relief was not granted. The Court directed the petitioner to pay 15% of the disputed tax within six weeks, allowing an opportunity to present objections and redo the assessment if the condition is met.

Conclusion:
The Court found errors in the Assessment Order due to the improper clubbing of purchases for multiple years into a single Assessment year. While not granting full relief to the petitioner, the Court directed partial payment of disputed tax and provided an opportunity to present objections for a reassessment. This decision aimed to balance justice for the petitioner with safeguarding revenue interests, emphasizing transparency and compliance with tax regulations.