2020 (5) TMI 636 - HC - VAT and Sales Tax

Input tax credit - duty paying invoices - case of petitioner is that the petitioner had availed Input Tax Credit on the strength of invoices issued by dealers who had availed Input Tax Credit on the strength of invoices of dealers whose registrations were cancelled either and/or there was no proof of their sale of goods to the petitioner s sellers - HELD THAT - In this case, the petitioner claims to have availed Input Tax Credit on the strength of invoices raised by some of the dealers who had in turn purchased from other dealers who had not shown having sold the goods to the petitioner s dealers from whom the petitioner had purchased the goods - Since there are disputed questions of fact and the dispute is not purely confined only law, the present Writ Petitions are liable to be dismissed with liberty to the petitioner to file an statutory appeal before the Appellate Deputy Commissioner. The petitioner is permitted to file an appeal within a period of thirty days from date of receipt of a copy of this order subject to other requirements of pre-deposit under the provisions of the TNVAT Act, 2006 - petitioner dismissed.

Summary

Issues:
Challenging impugned orders on taxable turnover and tax liability for Assessment Years 2006-07 and 2007-08, validity of Input Tax Credit (ITC) claimed, maintainability of Writ Petitions due to alternate remedy available, circular transactions by dealers to pass on ITC without paying tax.

Analysis:
The petitioner challenged the impugned orders dated 30.04.2013 passed by the respondent Assistant Commissioner (CT) regarding taxable turnover and tax liability for the Assessment Years 2006-07 and 2007-08. The respondent contended that the petitioner availed ITC based on invoices from dealers whose registrations were cancelled or lacked proof of selling goods to the petitioner's sellers. The impugned orders disallowed the ITC claims and confirmed the tax liability of the petitioner. The petitioner relied on various legal precedents to support their case.

The respondent argued that the Writ Petitions were not maintainable as the petitioner had an alternate remedy to appeal before the Appellate Deputy Commissioner under Section 51 of the TNVAT Act, 2006. It was alleged that some dealers engaged in circular transactions to pass on ITC without paying tax, exploiting the provisions of the TNVAT Act, 2006. The court considered both parties' submissions.

The court observed that the disputes involved factual questions better suited for adjudication in appeals, where the appellate authority could verify the petitioner's claims. As the petitioner availed ITC based on invoices from dealers with questionable transactions, the court deemed the disputes not purely legal but factual. Consequently, the court dismissed the Writ Petitions, granting the petitioner liberty to file a statutory appeal before the Appellate Deputy Commissioner within thirty days.

Despite the delay in filing the Writ Petitions, the court permitted the petitioner to file appeals within the specified period, subject to pre-deposit requirements under the TNVAT Act, 2006. The Appellate Deputy Commissioner was directed to consider the appeals on merits and dispose of them within three months, without considering the limitation period. The court disposed of the Writ Petitions with these directions, emphasizing no costs were imposed, and related Miscellaneous Petitions were closed.