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2019 (5) TMI 908 - HC - VAT and Sales TaxRevision of assessment - reversal of ITC for purchases made by the petitioner from dealers whose TIN were cancelled - TNVAT Act - It is the case of the petitioner that the first respondent without applying his mind and without giving due consideration to the circular of the Commissioner of Commercial Taxes, VAT cell / 39009 / 2017 (VCC No.1060) dated 29.08.2007 has passed the order - HELD THAT - Admittedly, there is an appeal remedy available to the petitioner as against the order dated 03.04.2018 passed by the first respondent in A.P.No.44 of 2018. But instead of filing an appeal on the ground that the impugned order insofar as the allowance of the claim of ITC by the petitioner based on purchases from cancelled dealers is passed by the first respondent, with malafide intention and with blatant violations of the principles of natural justice and established position of law. This Court now needs to examine as to whether the ground raised by the petitioner amounts to violation of the principles of natural justice and whether the first respondent has passed the impugned order mechanically or by total nonapplication of mind. The first respondent has considered the impugned assessment order and only thereafter has passed the impugned order dated 03.04.2018. This Court leaves it open for the petitioner to satisfy the requirements of Section 58(1)(b) of the TNVAT Act, 2006 and satisfy the Tamil Nadu Sales Tax Appellate Tribunal, with sufficient cause for not having filed the appeal within the extended period of 60 days. As and when any appeal is filed under Section 58 of the TNVAT Act against the impugned order dated 03.04.2018, the Tamil Nadu Sales Tax Appellate Tribunal shall decide as to whether the appeal has been filed within the maximum period stipulated under the said Section or not. Petition dismissed.
Issues Involved:
1. Levy of tax on the receipt of commission. 2. Reversal of Input Tax Credit (ITC) for purchases made from dealers with cancelled registration certificates. 3. Imposition of penalty under Section 27(4) of the Tamil Nadu Value Added Tax (TNVAT) Act, 2006. Issue-wise Detailed Analysis: 1. Levy of Tax on the Receipt of Commission: The petitioner contested the levy of tax on the receipt of commission amounting to ?6,03,272/- at 5% per annum. The first respondent, in the impugned order dated 03.04.2018, framed this as a point for consideration. Upon review, the first respondent found in favor of the petitioner, determining that the levy of tax on the receipt of commission was incorrect, thus partly allowing the appeal on this ground. 2. Reversal of Input Tax Credit (ITC) for Purchases from Cancelled Dealers: The petitioner challenged the reversal of ITC for purchases made from dealers whose Taxpayer Identification Numbers (TIN) were cancelled. The petitioner argued that he had provided all necessary invoices and documents required under Section 19 of the TNVAT Act to substantiate his ITC claim. However, the first respondent upheld the reversal of ITC, stating that the petitioner failed to produce documentary evidence proving that the registration certificates of the selling dealers were cancelled merely with retrospective effect. The court noted that the first respondent had given due consideration to the assessment order and the petitioner's submissions before confirming the reversal of ITC. 3. Imposition of Penalty under Section 27(4) of the TNVAT Act: The petitioner also contested the penalty of ?1,95,549/- imposed under Section 27(4) of the TNVAT Act. The first respondent upheld the penalty, finding that the petitioner did not provide sufficient documentary evidence regarding the cancelled registration certificates of the selling dealers. The court observed that the first respondent had applied his mind and provided reasoning for the decision, thus rejecting the petitioner's claim of a non-speaking order. Jurisdiction and Principles of Natural Justice: The court examined whether the first respondent's order violated the principles of natural justice or was passed without application of mind. The court found that the first respondent had considered all points of contention and provided reasoning for the decisions. The petitioner was given opportunities to present his case, and the first respondent partly allowed the appeal, indicating a thorough review process. Statutory Remedy and Timeliness: The court emphasized that the petitioner had an available statutory remedy under Section 58 of the TNVAT Act to appeal to the Tamil Nadu Sales Tax Appellate Tribunal. The petitioner chose to file a writ petition instead of pursuing the statutory appeal within the prescribed period. The court noted that the appeal to the tribunal should have been filed within 60 days, with a possible extension of another 60 days for sufficient cause. The writ petition was filed beyond this period, and the court held that it was not the appropriate forum for redressal. Conclusion: The court dismissed the writ petition, stating that the first respondent's order did not violate principles of natural justice and was not passed without application of mind. The petitioner was directed to pursue the statutory remedy under Section 58 of the TNVAT Act if he wished to contest the impugned order further. The court also highlighted that the Tamil Nadu Sales Tax Appellate Tribunal has the authority to decide on the timeliness and sufficiency of cause for delayed appeals. Final Order: The writ petition was dismissed with no order as to costs, and the connected miscellaneous petition was closed.
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