2020 (6) TMI 357 - HC - VAT and Sales Tax

Input Tax Credit - wrongful disclosure of purchase and sales turnover to pass on input tax credit unauthorisedly to various buyers/dealers - HELD THAT - Though the petitioner has alleged connivance between the officers of the Commercial Tax Department and the third person who had allegedly accessed the login ID of the petitioner, the issue would be best left to the respondents to cause a proper and through investigation into the allegation with the help of the economic offences and cybercrime Wing of the state to find out whether indeed there was a misuse of the petitioner's login ID or whether the petitioner was himself/herself masquerading as unknown person to make it seem as if the petitioner's login Id was being misused. The pre-assessment notice as has been prayed for by the petitioner is not quashed - Suffice to state that the respondents shall take appropriate measures and cause an investigation into the complaint of the petitioner and seek help of the specialised investigation wings of the State concerned with cyber crime - This exercise shall be completed within a period of 12 months from date of receipt of this order. During the pendency of the aforesaid investigation, the impugned pre-assessment notice shall be kept in abeyance. Petition disposed off.

Summary

Issues:
1. Misuse of petitioner's login ID with the Commercial Tax Department.
2. Transition from Tamil Nadu General Sales Tax Act, 1959 to Tamil Nadu VAT Act, 2006.
3. Inability to file monthly returns due to login issues.
4. Allegations of connivance between officers and a third party.
5. Request to quash pre-assessment notice.

Analysis:
1. The petitioner alleged that their login ID with the Commercial Tax Department was misused by an unknown person to manipulate sales transactions for unauthorized input tax credit. The petitioner transitioned from the Tamil Nadu General Sales Tax Act, 1959 to the Tamil Nadu VAT Act, 2006, initially filing nil returns monthly but later requested to file annual returns.

2. Despite having an opportunity to conduct business in 2014-15, the petitioner faced login issues and was unable to file monthly returns for April and May 2014. Following advice from the assessing officer, the petitioner paid taxes via cheque. Subsequently, in March 2015, after receiving a new login ID and password, the petitioner filed a nil return.

3. The petitioner discovered that returns for specific periods were filed by an unknown person, suspecting connivance between Commercial Tax Department officers and the third party. The court declined to quash the pre-assessment notice, directing a thorough investigation into the allegations of login misuse with the assistance of the economic offenses and cybercrime wing.

4. The court ordered the investigation to be completed within 12 months, keeping the pre-assessment notice in abeyance. The petitioner was also given the option to approach the cybercrime wing for a separate investigation. The judgment concluded by disposing of the writ petitions with no costs and closing connected Miscellaneous Petitions.