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2024 (8) TMI 5 - HC - VAT and Sales TaxImposition of tax and penalty in respect of the belated filing of returns and the consequential reversal of Input Tax Credit (ITC) - HELD THAT - On examining the impugned order, it is evident that the petitioner's contention was accepted with regard to the wrong claim of ITC after noticing that the dealer had rectified the error. The respondent noticed that the returns for the month of March 2017 were filed belatedly on 02.08.2017. The order also records that the copy of the return was available on the web portal. The petitioner does not assert that the return was not filed on 02.08.2017 and that it was filed earlier. The turnover and other particulars were taken from the petitioner's returns while recording conclusions on this issue. Since the conclusion was based on a reasonable appraisal of the material, no interference is warranted as regards the tax component. Penalty - HELD THAT - The petitioner relied on the judgment of the Division Bench of this Court in M/S. SHREE LAXMI JEWELLERY LTD. VERSUS THE STATE OF TAMIL NADU, REP. BY THE JOINT COMMISSIONER (CT) , CHENNAI 2019 (3) TMI 297 - MADRAS HIGH COURT for the proposition that sub-section (4) of Section 27 of the TNVAT Act should not be invoked merely on account of belated filing of return. In spite of placing this judgment before the respondent, there is no mention of such judgment or any consideration of such principle in the impugned order. To that extent, interference with the order is called for. The petition is disposed of without any order as to costs by partly setting aside order dated 18.03.2024 only in so far as the imposition of penalty is concerned and remanding that aspect for reconsideration.
Issues:
1. Challenge to tax and penalty imposed for belated filing of returns and reversal of Input Tax Credit (ITC). 2. Request for rectification of wrong claim of ITC and imposition of penalty at 300%. 3. Invocation of sub-section (4) of Section 27 of the Tamil Nadu Value Added Tax Act, 2006 for penalty. 4. Failure to consider binding judgments of the High Court or Supreme Court for rectification. 5. Acceptance of rectification request for wrong claim of ITC but refusal to rectify belated filing of returns. 6. Disposal of W.P.No.18171 of 2024 with setting aside penalty imposition and remand for reconsideration. Analysis: 1. The judgment concerns the challenge to an order dated 18.03.2024 regarding tax and penalty imposed due to belated filing of returns and reversal of Input Tax Credit (ITC) for the assessment year 2016-2017. The petitioner did not initially challenge the assessment order issued on 03.09.2019 but filed a rectification application on 06.02.2023, which was rejected on 17.08.2023. Subsequently, a writ petition was filed, leading to the impugned order on 18.03.2024. 2. The petitioner's counsel argued that the rectification request for the wrong claim of ITC was accepted, but the issue of belated filing of returns and the consequent ITC reversal was not rectified. The petitioner requested a copy of the returns, which was not provided, and penalty was imposed at 300%. The counsel contended that penalty under sub-section (4) of Section 27 of the TNVAT Act should not apply for belated filing, citing relevant judgments. 3. The respondent, represented by the Additional Government Pleader, highlighted that the earlier non-speaking order was set aside, indicating that the petitioner had not been directed to provide the returns. The respondent argued against interference with the rectification order based on these grounds. 4. Upon examination, the court noted that the rectification was accepted for the wrong ITC claim but upheld the decision on belated ITC claim based on the dealer's belated filing of returns in March 2017. The court found the respondent's conclusion reasonable and based on material evidence, thus not warranting interference on the tax component. 5. Regarding the penalty imposition, the petitioner referred to a specific judgment for the inapplicability of sub-section (4) of Section 27 of the TNVAT Act for belated filing of returns. However, the impugned order did not mention or consider this judgment, leading to a call for interference with the penalty imposition aspect. 6. Consequently, the court disposed of the matter by partly setting aside the order dated 18.03.2024 concerning penalty imposition and remanding that aspect for reconsideration. The respondent was directed to issue a fresh order within three months, providing a reasonable opportunity to the petitioner, including a personal hearing, to address the penalty issue.
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