2014 (10) TMI 93 - HC - VAT and Sales Tax

Benefit of Input Tax Credit - penalty at 150% under Section 27(3) (c) of the Tamil Nadu Value Added Tax Act, 2006 - Held that - A perusal of the records would show that the authority had issued the show cause notices on 06.05.2014 granting fifteen days time to file its objection and the petitioner has received the same only on 22.05.2014. However, the authority without even waiting for the time granted for filing the objections by the petitioner had passed the impugned order on 06.06.2014. Hence, the same is liable to be set aside and accordingly, it is set aside. However, the petitioner is directed to approach the respondent and file its objections within one week from today without waiting for this order copy . On such objections being filed, the respondent is directed to consider the same afresh and pass orders on merits and in accordance with law - Decided in favour of assessee.

Summary

Issues:
Quashing of order dated 06.06.2014 passed by the respondent in TIN No.33231543041 for assessment years 2012-13 and 2013-14.

Analysis:
The petitioner, a dealer in iron and steel, challenged the order passed by the respondent based on an inspection report by enforcement wing officers. The show cause notices alleged circular transactions with the same dealers, affecting Input Tax Credit. The notices proposed reversing the credit and imposing a penalty under Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006. The assessment order was issued on 06.06.2014 without allowing the petitioner to file objections, leading to the writ petitions.

The petitioner argued that they received the show cause notices on 22.05.2014, with a deadline of 06.06.2014 to file objections. Despite attempting to submit objections on the same day, the authority refused to accept them and passed the order. Reference was made to a Circular stating the final order should not be passed on the last date fixed for a reply. The respondent admitted passing the order prematurely on the fifteenth day instead of waiting for the next day.

The High Court found the authority had prematurely passed the order without waiting for the objection filing deadline. The court set aside the order and directed the petitioner to file objections within a week without waiting for the court's order copy. The respondent was instructed to reconsider the objections and pass orders in accordance with the law.

In conclusion, both writ petitions were allowed with no costs, and the connected miscellaneous petitions were closed.