2021 (3) TMI 234 - HC - VAT and Sales Tax

Maintainability of petition - availability of alternative remedy - Section 22(2) of Tamil Nadu Value Added Tax Act - mismatch of purchase - HELD THAT - It appears that the Government filed a petition seeking review of the order made in M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER 2017 (3) TMI 536 - MADRAS HIGH COURT where it was held that this Court is fully convinced that the procedure adopted by the respondent, Assessing Officers in all these cases are half baked attempts, which have not yielded results and these cases are before this Court or before the Appellate Authorities and all that the Assessing Officers can record is that they have issued show cause notices or passed orders reversing the Input Tax Credit with no appreciable impact on the revenue collection. - It is now stated at the Bar that even while dismissing the review petition, some observations were made. The fact remains that the procedure laid down in M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED has not been followed in this case. Even though the petitioner has furnished certain material evidence in support his contentions, they have been casually brushed aside - the matter is remitted to the file of the second respondent to hear the issue and pass orders afresh - Petition allowed by way of remand.

Summary

Issues:
Assessment based on deemed assessment under Section 22(2) of Tamil Nadu Value Added Tax Act, discrepancies found during inspection, issuance of pre-revision notice, rejection of petitioner's reply, quashing of impugned order, adherence to procedure laid down in J.K.M. Graphics case, remittance of 10% tax amount demanded by second respondent.

Analysis:
The petitioner, a registered dealer, was assessed for the years 2014-15 on a deemed assessment basis under Section 22(2) of the Tamil Nadu Value Added Tax Act. Subsequently, discrepancies were discovered during an inspection of the petitioner's business premises. The second respondent issued a pre-revision notice on 06.02.2019, to which the petitioner responded. However, the second respondent partially confirmed the proposals from the pre-revision notice in the impugned order dated 29.03.2019. This led to the filing of a writ petition challenging the order.

The second respondent opposed the prayer in the writ petition through a counter affidavit, arguing that the writ petition was not maintainable due to the availability of alternative remedies. After considering the contentions from both sides and reviewing the materials on record, the court noted that the petitioner agreed to remit 10% of the tax amount demanded without prejudice to their contentions.

The petitioner's counsel argued that the assessment authority failed to conduct an inquiry with the other end dealer, as required by the precedent set in the J.K.M. Graphics case. The court acknowledged that the procedure outlined in the J.K.M. Graphics case had not been followed in the present case. It was mentioned that the government had filed a review petition in the J.K.M. Graphics case, and even though it was dismissed, certain observations were made. Due to the non-adherence to the procedure established in the J.K.M. Graphics case, the court quashed the impugned order and remitted the matter back to the second respondent to hear the issue and pass fresh orders in accordance with the law and the J.K.M. Graphics case.

The court directed the second respondent to follow the procedure from the J.K.M. Graphics case, issue a fresh hearing notice to the petitioner, and pass orders afresh. Additionally, the petitioner was instructed to pay 10% of the tax amount demanded within three weeks. The writ petition was allowed on these terms, with no costs incurred, and the connected miscellaneous petition was closed.