2016 (11) TMI 808 - HC - VAT and Sales Tax

Revision of Assessment - TNVAT Act, 2006 - CST Act, 1956 - purchase from the Registration cancelled dealers and availing of Input Tax Credit - principles of natural justice - Held that - Having failed to avail the three opportunities granted, now the petitioner cannot contend that the impugned order has to be set-aside and the assessment should be re-done for the entire year. However, with a view to afford an opportunity to the petitioner, this Court is inclined to give one more opportunity to the petitioner to go before the Assessing Officer, subject to certain conditions - petition disposed off - decided in favor of petitioner.

Summary

Issues: Revision of Assessment under TNVAT Act, Failure to avail opportunities for objections, Application of principles of natural justice, Provisional assessment, Affording opportunity to the petitioner.

Revision of Assessment under TNVAT Act:
The petitioner, a Trader in raw Hides and Skins, was registered under the TNVAT Act. The impugned order was a Revision of Assessment due to the petitioner availing Input Tax Credit from registration-cancelled dealers. The respondent issued notices to the petitioner regarding the tax amount and interest owed, based on transactions with such dealers. The petitioner's claim that their Accountant met the respondent to explain transactions was rejected due to lack of proof. The Assessing Officer provided multiple opportunities for objections, but the petitioner failed to respond to the notices.

Failure to avail opportunities for objections:
Despite being given three opportunities to submit objections, the petitioner did not respond to the notices issued by the Assessing Officer. The petitioner's contention that their Accountant met the respondent remained unsubstantiated. The court noted the petitioner's lethargic attitude in not availing the opportunities granted, leading to the finalization of the assessment by the respondent.

Application of principles of natural justice:
The court held that due to the petitioner's failure to avail the opportunities granted, there was no violation of principles of natural justice. The impugned order was finalized by the respondent as a result of the petitioner's inaction and inability to substantiate their claims.

Provisional assessment:
The petitioner argued that the assessment was provisional and requested a re-assessment for the entire year. Citing precedents, the petitioner sought to set aside the impugned order. The court noted that the question of applying the precedent would only arise if the petitioner had diligently pursued the matter, which was not the case here.

Affording opportunity to the petitioner:
Despite the petitioner's lapses, the court decided to afford one more opportunity to the petitioner. The court directed the petitioner to pay 15% of the disputed tax within three weeks. If the payment was made, the petitioner could treat the impugned assessment order as a show-cause notice, submit objections within seven days, and have the assessment redone for the entire year. Failure to comply would result in dismissal of the writ petition. Compliance would prevent coercive action for tax recovery and lead to a re-assessment by the respondent.

This detailed analysis of the judgment covers all the issues involved comprehensively, highlighting the key legal aspects and decisions made by the court.