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2016 (1) TMI 277 - HC - VAT and Sales TaxManufacture of finished leather - Demand of differential ITC - reversal of ITC under Section 19(2)(V) of the TNVAT Act - Held that - Originally considering the transactions relating to CST for the assessment year 2012-13, an oder of assessment came to be passed, granting the relief as prayed for. Subsequently, the same turnover and the corresponding purchases relating to Form C declarations were sought to be brought in for the assessment year 2012-13 relating to TNVAT Act, as taxable turnover. Concluding that the refund claim made out in respect of the transactions related to C forms is not eligible, the respondent sought to include the same for the purpose of reversal of ITC, invoking Section 19(2)(V) of the TNVAT Act for the assessment year 2012-13 and passed the impugned order dated 30.04.2015, reversing ITC to the tune of ₹ 2,69,629/- for the said period. During the said assessment period, viz., 2012-13, there is no power vested with the respondent to reverse the ITC, since the amended provision of Section 19(2)(V) of the TNVAT Act, 2006 by Act 28 of 2013 came into effect only from 11.11.2013. Hence, to this extent, the impugned assessment order needs interference. Admittedly, the explanation of the petitioner dated 16.02.2015 is also not considered by the respondent. - Matter remanded back - Decided in favour of assessee.
Issues:
Challenge to assessment order for the assessment year 2012-13 under TNVAT Act, 2006. Detailed Analysis: 1. The petitioner, a registered dealer, challenged the assessment order for the assessment year 2012-13 under the CST Act and TNVAT Act. The CST assessment was completed with tax levied at 2% based on C Form, while the TNVAT assessment included a demand for differential ITC at 3% on estimated purchase value. The petitioner objected to the demand, citing compliance with provisions and previous ITC reversals. However, the impugned TNVAT order confirmed the ITC reversal without considering the petitioner's reply, leading to the writ petition challenging the order. 2. The petitioner's counsel argued that invoking Section 19(2)(V) of the TNVAT Act for demanding the 3% ITC difference on inter-state sales was unauthorized before November 2013 due to an amendment. Additionally, the counsel highlighted the violation of natural justice as the petitioner's reply addressing queries was not considered before the order was passed. The lack of opportunity for a hearing was also emphasized as a ground for quashing the impugned order. 3. The Additional Government Pleader defended the department's order, leading to the Court's analysis of the submissions and records. The Court noted the initial CST assessment granting relief, followed by an attempt to include the same turnover under TNVAT Act for ITC reversal. However, it was found that the respondent lacked the authority to reverse ITC for the assessment year 2012-13 as the relevant amendment came into effect only from November 2013. The Court also observed that the petitioner's explanation was not considered by the respondent, necessitating interference in the assessment order. 4. Consequently, the Court set aside the impugned order for the assessment year 2012-13 and remanded the matter to the respondent for appropriate orders in line with the Act, ensuring due opportunity for the petitioner. The respondent was directed to complete this process within six weeks from the date of receiving the order copy. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed, concluding the legal judgment.
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