2019 (7) TMI 1295 - HC - VAT and Sales Tax

Validity of Deemed Assessment - Section 27 of TNVAT Act - reversal of Input Tax credit - HELD THAT - What is of importance is mismatch. In the instant case, after hearing both the learned counsel, there is no disputation that this matter is covered by an order made by this Court in M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER 2017 (3) TMI 536 - MADRAS HIGH COURT where the Matters are remanded to the respective Assessing Officers, to undertake a fresh exercise by conducting a thorough enquiry in consultation with the Assessing Officers of the other end dealer. Impugned order is set aside and remitted back to the respondent - petition allowed by way of remand.

Summary

Issues:
1. Revisional notice under TNVAT Act regarding discrepancies in assessment
2. Three specific issues in the revised Assessment Order
3. Circular issued by the Office of the Commissioner of State Tax in response to a previous case

Analysis:

1. The writ petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, 2006, was subject to a deemed assessment following an inspection that revealed discrepancies. A revisional notice was issued highlighting issues, leading to a revised Assessment Order dated 29.01.2019. The matter pertained to three key issues: ITC reversal on purchases from a canceled dealer, unaccounted consignor movement, and differences between two annexures.

2. The crucial aspect of the case was the mismatch in the assessment. Referring to a previous judgment, the Court emphasized the need for a centralized mechanism to handle discrepancies efficiently to avoid multiple proceedings and pending cases. A circular, Circular No.3 of 2019, was issued by the Commissioner of State Tax, Chepauk, Chennai, following the earlier judgment, outlining procedures for addressing mismatch issues.

3. In light of the circular and the need for a structured approach to handle discrepancies, the Court set aside the impugned revised Assessment Order without expressing an opinion on its merits. The matter was remitted back to the respondent, with directions to await the outcome of a new module and mechanism being developed. Once the new process is established, the respondent was instructed to issue a fresh notice to the petitioner and conduct the revised assessment promptly and in accordance with the law.

This detailed analysis of the judgment highlights the issues surrounding the revisional notice, specific discrepancies in the assessment, and the importance of a centralized mechanism to address such issues effectively, as emphasized by the Court and the subsequent circular issued in response.