2019 (7) TMI 1120 - HC - VAT and Sales Tax

Input Tax Credit - purchases where the registration of selling dealers, from whom writ petitioner had purchased goods, have been cancelled even prior to the date of purchase - HELD THAT - This Court with the considered view that respondent has examined the documents in the personal hearing which were given by writ petitioner/dealer though writ petitioner had not responded to the notice and after examining the documents, respondent has returned factual findings, which has already been alluded - reversal of ITC has been ordered under Section 19(15) of TNVAT Act. If there are any errors in the factual findings, it at best qualifies as a ground for appeal and it does not call for interference in writ jurisdiction. Alternative remedy - HELD THAT - Alternate remedy rule is a self imposed restriction qua writ jurisdiction. Alternate remedy is not an absolute rule. It is not a rule of compulsion, but it is a rule of discretion. Though alternate remedy is a self imposed restriction qua writ jurisdiction and it is only a rule of discretion not being a rule of compulsion - this Court deems it appropriate to not to interfere in the impugned order in this writ petition leaving it to the writ petitioner to assail the impugned order by way of an appeal before the appellate authority. This Court is informed that the alternate remedy is by way of an appeal under Section 51 of TNVAT Act and that the Appellate Authority is the jurisdictional Appellate Deputy Commissioner. Writ petition is dismissed preserving the rights of the writ petitioner to avail appeal remedy, if writ petitioner chooses to do so albeit with the aforesaid caveat regarding delay.

Issues involved:
1. Reversal of Input Tax Credit (ITC) under Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).
2. Interpretation of Section 19(15) of TNVAT Act.
3. Examination of factual findings by the respondent.
4. Application of the alternate remedy rule in tax matters.

Analysis:

Reversal of Input Tax Credit (ITC):
The case involves the respondent issuing a notice to the writ petitioner for reversal of ITC on purchases made from dealers whose registrations were cancelled before the purchase dates. The respondent conducted a personal hearing where the writ petitioner submitted documents without detailed explanations. Based on these documents, the respondent passed a revised assessment order for ITC reversal. The impugned order specified the dealers, their cancelled registrations, and the reversal amounts in a tabular form. The respondent provided reasons for the reversal, citing discrepancies in the purchase transactions.

Interpretation of Section 19(15) of TNVAT Act:
The writ petitioner contended that the reversal of ITC under Section 19(15) should apply only from the date of cancellation of the selling dealer's registration. However, the respondent, after examining the documents and conducting a personal hearing, found that the cancellations occurred before the purchase dates. The respondent's decision to order ITC reversal was based on these factual findings, which were not challenged effectively by the writ petitioner during the proceedings.

Examination of Factual Findings:
The respondent thoroughly examined the documents provided by the writ petitioner during the personal hearing, despite the lack of a proper response to the initial notice. The respondent returned factual findings regarding the timing of registration cancellations in relation to the purchase transactions. The respondent's decision to order ITC reversal was grounded in these factual findings, indicating a detailed assessment of the case.

Application of the Alternate Remedy Rule:
The court discussed the principle of alternate remedy, emphasizing its importance in tax matters. Citing relevant Supreme Court judgments, the court highlighted that the writ jurisdiction should not interfere when an alternate statutory remedy is available. In this case, the court decided not to intervene in the impugned order, leaving the writ petitioner the option to appeal before the Appellate Authority under Section 51 of the TNVAT Act. The court advised the writ petitioner on seeking condonation of delay and exclusion of time spent in the writ petition if opting for the appeal route.

In conclusion, the High Court dismissed the writ petition, preserving the writ petitioner's right to pursue the appeal remedy before the Appellate Authority, subject to procedural considerations and without being influenced by the court's observations in the writ petition.

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