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2023 (4) TMI 596 - HC - VAT and Sales TaxDisallowance of ITC - It is alleged that no documentary evidence has been produced as required in terms of Rule 10(6)(b) of the Tamil Nadu Value Added Tax Rules, 2007 - HELD THAT - The entirety of the reply has been extracted in the assessment order. However, while confirming the disallowance of ITC, the officer merely refers to Section 19(13) of the Act and nothing else and does not address the contentions put forth by the petitioner in the reply. There are no justification for the reversal of ITC, finding the impugned order cryptic and arbitrary. The reversal of ITC penalty are set aside. Petition allowed.
Issues involved: Disallowance of sales returns and disallowance of Input Tax Credit (ITC) under Section 19(13) of the Tamil Nadu Value Added Tax Act, 2006.
For the disallowance of sales returns, the petitioner, a dealer under the Act, contested the disallowance of sales returns totaling Rs. 62,31,921, claiming exemption under Rule 10(6)(b)(i) of the TNVAT Rules 2007. The officer disallowed the sales return due to lack of documentary evidence as per Rule 10(6)(b) of the Rules. The petitioner submitted a reply with annexures during the personal hearing, but the officer's conclusion lacked proper consideration and application of mind. The impugned order was set aside due to this deficiency. Regarding the reversal of ITC under Section 19(13), the petitioner disputed the proposed reversal of ITC on a purchase of goods, arguing that the seller had not reported the sales in the monthly returns. The petitioner provided detailed arguments citing legal judgments and contending that they had fulfilled their burden of proof under Section 17 of the Act. The officer, however, did not address the contentions raised by the petitioner in their reply and simply referred to Section 19(13) of the Act. The court found the officer's decision cryptic and arbitrary, setting aside the reversal of ITC and associated penalty. In conclusion, the writ petitions were allowed in part, with no costs awarded, and connected miscellaneous petitions were closed.
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