2024 (8) TMI 82 - HC - VAT and Sales Tax

Challenge to Revision Assessment Orders and demand notices - petitioner filed Petitions under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 to rectify the error in the Assessment Orders - HELD THAT - The impugned Revision Assessment Orders indicate that the Department has issued summons to the three persons namely, Tvl.R.Suresh Kumar, Tvl.S.Saravanan and Tvl.Kaleeswari Agencies through RPAD on 04.07.2022, 08.08.2022 29.08.2022. Two of these persons have acknowledged having received the summons. Summons issued to one of them was returned with the remarks ' no such addressee at the address '. The petitioner itself requested a voluntary arrangement for the cross-examination of these persons but failed to take any steps to bring them before the respondent. In my view, the petitioner's witnesses cannot be summoned by the Department. It is for the petitioner to bring them as witnesses. In any event, if the said witnesses are produced by the petitioner, it is for the Department to cross-examine them. Be that as it may, since the petitioner had deposited a sum of Rs. 50,00,000/- as per direction of this Court, partial relief granted by quashing the impugned Revision Assessment Orders and remitting the case back to the respondent to pass fresh orders on merits subject to the petitioner producing the so-called persons as the petitioner's witnesses for cross-examination by the Department - Since the petitioner had already deposited a sum of Rs. 50,00,000/-, there shall be a further direction to the petitioner to deposit another sum of Rs. 25,00,000/- in three installments (Rs. 10,00,000/-, Rs. 10,00,000/- Rs. 5,00,000/- respectively), within a period of three months from today. There are 21 properties of the petitioner which have been attached pursuant to the impugned Revision Assessment Orders dated 14.03.2024. The respondent is directed to raise the order of attachment by restricting the order of attachment to cover the balance amount of tax due from the petitioner. The application shall be disposed of on merits within a period of 6 months thereafter. Petition disposed off.

Summary

Issues:
Challenging Revision Assessment Orders and consequential demand notices for multiple assessment years, failure to rectify errors in assessment orders, lack of summons to key persons for cross-examination, liability for tax payment due to allowing third parties to use VAT registration, attachment of properties due to tax liability.

Analysis:

1. Challenging Revision Assessment Orders: The petitioner challenged Revision Assessment Orders dated 14.03.2024 for Assessment Years 2010-2011 to 2015-2016. The petitioner filed petitions under Section 84 of the Tamil Nadu Value Added Tax Act, 2006 to rectify errors in the assessment orders dated 18.03.2020. Subsequent rounds of litigation ensued due to unsatisfactory responses, leading to the present Writ Petitions challenging the latest Revision Assessment Orders.

2. Cross-Examination and Summons: The petitioner argued that crucial witnesses were not summoned for cross-examination, affecting the outcome of the assessment. However, the court noted that the Department had issued summons to the relevant persons, and the petitioner failed to bring them before the respondent for cross-examination. The responsibility to produce witnesses rested with the petitioner, and the Department could cross-examine them if produced.

3. Tax Liability and VAT Registration: The petitioner allowed third parties to conduct business using their VAT registration, leading to tax liability issues. The court emphasized that it was the petitioner's responsibility to recover any tax liability from the third parties named. Despite the petitioner's actions, a significant sum was deposited as per the court's direction, influencing the court's decision on granting partial relief.

4. Attachment of Properties: The Revision Assessment Orders resulted in the attachment of 21 properties belonging to the petitioner. The court directed the respondent to limit the attachment to cover the remaining tax amount due, with a timeline set for the disposal of the application related to the attachment within six months.

5. Court's Decision: The court granted partial relief by quashing the impugned Revision Assessment Orders and remitting the case back to the respondent for fresh orders, subject to the petitioner producing key persons for cross-examination. Additionally, the petitioner was directed to deposit a further sum in installments. The court highlighted the petitioner's responsibility to bring the named persons as witnesses and suggested civil court action if needed for tax liability recovery.

6. Conclusion: The Writ Petitions were disposed of with no costs, and connected Miscellaneous Petitions were closed. The judgment addressed the complex issues surrounding the Revision Assessment Orders, summonses, tax liability, and property attachment, providing detailed directions for further proceedings and compliance.