2021 (4) TMI 511 - HC - VAT and Sales Tax

Finalisation of assessment - inclusion of amount computed under Income Tax for the purpose of computing the petitioner's turnover under TNVAT Act - levy of tax and penalty - HELD THAT - There is no clear proof evidencing the production of various proofs. Be that as it may, it appears that in the impugned order, atleast a portion of the amount that represents the petitioner's income amenable to income tax, has been included for the purpose of computing the petitioner's turnover under TNVAT Act. That apart, another defect pointed out by the assessing authority rests on mismatch. However, the procedure laid down in J.K.M.Graphics Solution Private Limited case 2017 (3) TMI 536 - MADRAS HIGH COURT , was not followed.

Summary

Issues:
Assessment under TNVAT Act, 2006 for the assessment year 2014-15.

Analysis:
The petitioner, an assessee registered under the TNVAT Act, 2006, had their assessment finalized on a deemed assessment basis. The assessing authority issued a pre-revision notice after scrutinizing the petitioner's book of accounts, leading to the impugned order levying tax and penalty for the assessment year 2014-15. The petitioner challenged this order by filing a writ petition.

The respondent filed a detailed counter affidavit, and the Government Advocate urged the court to uphold the impugned order. After considering the arguments from both sides and examining the records, the court proceeded with the case.

Before presenting arguments, the petitioner's counsel informed the court that the petitioner would remit 10% of the disputed tax amount to the second respondent by a specified date. This remittance was made without prejudice to the petitioner's contentions, with the understanding that it would abide by the outcome of any potential remand order following the court's decision. This undertaking was recorded by the court.

The petitioner, engaged in trading LLOYD Air Conditioners, also provided maintenance services for which charges were paid. The petitioner argued that these charges constituted income not covered by the TNVAT Act, as TDS had been deducted for these payments. Additional documents supporting this claim were submitted by the petitioner.

Although the assessing authority included a portion of the income in the turnover under TNVAT Act and pointed out a mismatch, it was noted that the procedure outlined in a specific case was not followed. Based on these grounds, the court decided to set aside the impugned order and remit the matter back to the second respondent for fresh orders in accordance with the law. The petitioner was instructed to adhere to the earlier undertaking, and no costs were awarded in this decision.

In conclusion, the writ petition was allowed, the impugned order was set aside, and the matter was remitted for fresh consideration by the second respondent. A connected miscellaneous petition was closed as a result of this judgment.