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2020 (9) TMI 169 - HC - VAT and Sales Tax


Issues:
Challenge to re-assessment notice denying input credit for VAT collected by Southern Railway for sales, seeking to quash the notice by Writ of Certiorari, and other consequential reliefs.

Analysis:
The petitioner challenged a notice, Ext.P2, proposing re-assessment of the turnover for the assessment year 2013-14, aiming to disallow input credit for VAT collected by Southern Railway for the petitioner's sales. The petitioner sought to quash the notice through a Writ of Certiorari, along with other related reliefs. Ext.P2, issued by the State Tax Officer, Ottapalam, invoked Section 25(1) read with Section 25AA of the KVAT Act, 2003, requiring the petitioner to justify the assessment to the best of judgment under the mentioned provisions.

The petitioner's counsel argued that the issue involved procurement of goods for Indian Railways, necessitating numerous documents from Southern Railway to effectively respond to the notice. However, due to the COVID-19 pandemic and resultant restrictions, obtaining these documents posed a challenge for the petitioner. It was contended that the Railways were not operating at full capacity due to pandemic restrictions, requiring significant time to provide the relevant documentation.

The Court acknowledged that Ext.P2 was merely a show cause notice and deemed it unnecessary to intervene in the assessment proceedings at that stage. Nonetheless, considering the difficulties faced by the petitioner in obtaining necessary documents within the stipulated timeframe, the Court granted the petitioner an extension. The petitioner was permitted to submit a response to Ext.P2, along with supporting documents, within three months from the judgment date. If the petitioner complied within the specified period, the first respondent was directed to evaluate the petitioner's contentions and decide the matter post a personal hearing. Additionally, if the first respondent discovered that the Railway had already remitted the disputed tax amount, they were authorized to consider discontinuing the proceedings, if permissible and in accordance with the law.

 

 

 

 

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