2019 (8) TMI 198 - HC - VAT and Sales Tax

Input tax credit - Branch transfers - section 4(4) of the Telangana Value Added Tax Act, 2005 - HELD THAT - Perusal of the impugned revisionary order demonstrates that though the appellant was put on notice requiring it to submit its objections, if any, along with documentary evidence, it admittedly failed to do so. In such circumstances, though we cannot find fault with the revisionary authority for proceeding in the matter unilaterally, the fact remains that the revisionary order has adverse financial implications upon the appellant apart from laying down a legal principle with regard to interpretation of the statutory provision. As such an interpretation would have a continuing effect and as the appellant admittedly did not choose to avail the opportunity to put forth its case before the revisionary authority, one last opportunity should be afforded to the appellant to go before the revisionary authority so as to explain its stand with the help of documentary evidence and case law. The Revision initiated by the Commissioner under Section 32 of the Act of 2005 shall stand remitted to the file of the revisionary authority for consideration afresh on merits after giving due opportunity of hearing to the appellant - revision allowed by way of remand.

Issues:
1. Assessment to tax under Section 4(4) of the Telangana Value Added Tax Act, 2005.
2. Appeal before the Appellate Deputy Commissioner.
3. Partial allowance of the appeal related to levy of tax on purchase of old gold/jewellery.
4. Remand of the matter to the assessing authority for consideration of input tax credit on branch transfers.
5. Orders passed by the assessing authority levying tax and restricting input tax credit.
6. Revision show cause notice issued by the Commissioner of Commercial Taxes.
7. Failure of the appellant to submit objections and documentary evidence.
8. Adverse financial implications and legal principle in the revisionary order.
9. Granting one last opportunity to the appellant to present its case before the revisionary authority.
10. Setting aside the order of the Commissioner and remitting the revision for fresh consideration.

Analysis:
1. The appellant underwent assessment to tax under Section 4(4) of the Telangana Value Added Tax Act, 2005 for the tax period from November 2012 to January 2014. An appeal was filed before the Appellate Deputy Commissioner, which partially allowed the appeal concerning the levy of tax on the purchase of old gold/jewellery from unregistered dealers. The remaining issues were remanded to the assessing authority for the consideration of input tax credit related to branch transfers.

2. The assessing authority, the Commercial Tax Officer, levied tax under Section 4(4) of the Act and restricted the input tax credit on account of branch transfers. Subsequently, a revision show cause notice was issued by the Commissioner of Commercial Taxes, resulting in the impugned order dated 27th April 2019.

3. The appellant failed to submit objections and documentary evidence despite being notified to do so. The court acknowledged the adverse financial implications and the legal principle established by the revisionary order due to the appellant's inaction. Therefore, the court granted one final opportunity to the appellant to present its case before the revisionary authority with supporting documentary evidence and case law.

4. Consequently, the court allowed the appeal, setting aside the order of the Commissioner. The revision initiated by the Commissioner was remitted to the revisionary authority for a fresh consideration on merits, ensuring the appellant receives a fair hearing and an opportunity to present its case effectively with documentary evidence and legal arguments.

5. The court directed the revisionary authority to issue a fresh notice, provide sufficient time for the appellant to prepare its case, allow an oral hearing, and then make appropriate orders in the revision. The judgment concluded by closing any pending miscellaneous petitions and stating that there would be no order as to costs in this matter.

← Previous Next →