2020 (6) TMI 683 - HC - VAT and Sales Tax

Levy of VAT - certain defects and estimated visible loss and invisible loss - reversal of ITC for exempted sales - HELD THAT - Since the refund order is relating to the assessment year 2011-12, the second respondent shall decide the issue afresh, after issuing show cause notice to the petitioner clearly setting out the circumstances under which they propose to revise or call upon the petitioner to reverse refund sanctioned and after receiving their objection. Such notice be issued by the second respondent within a period of four weeks from the date of receipt of a copy of this order. On receipt of such notice, the petitioner shall submit their objections along with the required documents, if any, within a period of two weeks thereafter. The second respondent shall consider the same and pass appropriate orders, on merits and in accordance with law, after affording due opportunity of personal hearing to the petitioner, within a period of four weeks therefrom - Petition allowed by way of remand.

Summary

Issues:
Challenge to order dated 25.10.2013 regarding refund of input tax paid for exempted sales from 2007-2008 to 2011-2012.

Analysis:
The petitioner challenged an order regarding refund of input tax paid for exempted sales during specific years. The petitioner sought relief based on a previous court decision. The court referred to a previous judgment stating that the dealer claiming refund must satisfy the Assessing Authority that the claim is not restricted by any conditions under the VAT Act. The court emphasized that Assessing Authorities cannot apply a uniform percentage as invisible loss without proper verification. The court set aside all notices for reopening and orders reversing input tax credit, granting liberty to issue appropriate show cause notices and proceed lawfully. The court highlighted that Section 18 of the TNVAT Act is subject to restrictions and conditions under Section 19.

The Additional Government Pleader for the respondents agreed with the petitioner's counsel's submission and had no serious objections to granting relief. The court, considering the facts and submissions, set aside the impugned order dated 25.10.2013. The court directed the second respondent to decide the issue afresh for the assessment year 2011-12 after issuing a show cause notice to the petitioner, allowing them to submit objections and required documents. The court instructed the second respondent to pass appropriate orders within a specified timeline after affording the petitioner a personal hearing.

In conclusion, the writ petition was allowed, setting aside the impugned order and directing a fresh decision by the second respondent. The court specified timelines for issuing notices, submitting objections, and passing orders. No costs were awarded, and the connected miscellaneous petition was closed.