2014 (9) TMI 871 - HC - VAT and Sales Tax

Reversal of input tax credit - Non receipt of SCN - Held that - Authority without following the procedure contemplated under law, has passed the impugned orders for all the eight assessment years on a single day, which is against the principles of natural justice. Hence, considering the fact that the impugned orders came to be passed without even serving the proposal notice on the petitioner, the same are liable to be set aside. Accordingly, the impugned orders dated 07.06.2014 relating to the assessment years 2006-07 to 2013-14 are set aside and the matter is remitted back to the authority concerned for fresh consideration after affording an opportunity to the petitioner to file its objections, however subject to the certain conditions - Decided conditionally in favour of assessee.

Summary

Issues:
1. Quashing of order dated 07.06.2014 passed by the respondent in TIN No.33081702931 for assessment years 2006-2007 to 2013-2014.

Analysis:
The petitioners, engaged in trading iron and steel, sought to quash the order passed by the respondent following a surprise inspection. The petitioner claimed non-receipt of the show cause notice dated 25.04.2014 proposing to reverse the input tax credit. The petitioner argued that the impugned orders were passed without proper service of notice, violating principles of natural justice. The counsel for the petitioner highlighted that the impugned orders were sent to the same address that the show cause notice was returned from, emphasizing non-compliance with the procedure under Rule 19(1)(d) of the Tamil Nadu Value Added Tax Rules, 2007.

The learned Government Advocate acknowledged that the impugned orders were issued without serving notice on the petitioner for all assessment years. However, he suggested that upon payment of a certain amount, the matter could be remitted back to the respondent for reconsideration with adequate opportunity for the petitioner. The court, after hearing both sides, noted the absence of proper procedure in passing the impugned orders for all assessment years on the same day, contrary to principles of natural justice. Consequently, the court set aside the impugned orders dated 07.06.2014 for the assessment years 2006-07 to 2013-14, remitting the matter back to the authority for fresh consideration. The petitioner was directed to file objections within fifteen days and deposit 5% of the total tax demanded for each assessment year by a specified date. The authority was instructed to provide a personal hearing to the petitioner and pass fresh orders expeditiously in accordance with the law.

In conclusion, the court disposed of both writ petitions without costs, closing the connected miscellaneous petitions.