2024 (8) TMI 777 - HC - VAT and Sales Tax

Challenge to assessment order - wrongful availment of input tax credit - misuse of TIN number - HELD THAT - Although the impugned order is a detailed order, it is noticed that the impugned order merely sets out the order passed by this Court on 13.12.2023, reply of the petitioner and has thereafter referred to transactions for the previous assessment years, namely 2011-12, 2012-13 and has referred to few dealers, who have allegedly availed input tax credit on the strength of the invoices generated from the petitioner's TIN number. As far as the subject assessment year 2014-15 is concerned, the details have not been furnished, although the impugned order states that the petitioner has not produced any documentary evidence for the orders already passed for assessment year 2014-15 with respect to the audit points. Hence, the order, dated 20.08.2019 which stood quashed by order in W.P(MD)No.29434 of 2023, dated 13.12.2023 was correct and in accordance with law. For the first time a reference is made to the sale made by the petitioner to one Tv.Malarvizhi Constructions. This ought to have been informed to the petitioner before confirming the demand vide impugned order, dated 14.05.2024. Thus, there is a violation of principles of natural justice. Hence, the impugned order, dated 14.05.2024 is quashed and the case is remitted back to the respondents to pass a fresh order on merits and in accordance with law. Petition disposed off by way of remand.

Summary

Issues:
Challenge to assessment order for the year 2014-15 based on notices sent to old address, alleged sales to third parties, misuse of TIN number, abuse of court proceedings, violation of principles of natural justice.

Analysis:
The petitioner challenged the assessment order for the year 2014-15, citing that notices were sent to the old address despite the knowledge of the petitioner's new address. The previous order, dated 20.08.2019, was quashed in a prior litigation. The petitioner contended that the impugned order, dated 14.05.2024, lacked details of alleged sales to third parties and was solely based on audit points raised by the Accountant General, Chennai. The petitioner also reported the misuse of their TIN number, leading to prosecutions. The court noted that the impugned order did not provide details for the subject assessment year and referred to transactions from previous years. The court found a violation of natural justice as the petitioner was not informed about the specific sale mentioned in the order.

The respondent defended the impugned order, stating it was well-reasoned and did not warrant interference under Article 226 of the Constitution. It was argued that the petitioner had an alternate remedy and the writ petition was an abuse of court proceedings. The respondent accused the petitioner of facilitating ineligible credit by improper sales practices. The court considered arguments from both sides.

The court observed that the impugned order lacked specific details for the assessment year 2014-15 and merely referenced past orders and transactions. Due to the lack of documentary evidence provided by the petitioner, the court upheld the previous order quashing the assessment. However, the court found a violation of natural justice regarding the specific sale mentioned in the impugned order. Consequently, the impugned order was quashed, and the case was remitted back to the respondents for a fresh order. The petitioner was directed to file a consolidated reply, and the respondents were instructed to provide details of the sale invoice in question before passing a final order.

In conclusion, the writ petition was disposed of with no costs, and the connected Miscellaneous Petition was closed. The court emphasized the importance of following principles of natural justice and ensuring proper communication of relevant details to the parties involved in tax assessment proceedings.