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2017 (2) TMI 1022 - HC - VAT and Sales TaxReversal of input tax credit - denial on the ground that there was a mismatch between the information available on the website of the Department, as against that which is contained in the returns filed by the petitioner - penalty u/s 27(3) of the TNVAT Act, 2006 - Held that - the respondent are directed to redo the assessment in a time bound manner, the needful would be done - appeal allowed by way of remand.
Issues:
Challenge to reversal of input tax credit based on mismatch in information and levy of penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006. Analysis: The petitioner contested three separate orders dated 06.09.2016 for assessment years 2008-2009, 2009-2010, and 2010-2011. The petitioner specifically objected to the reversal of input tax credit due to a supposed mismatch between the Department's website information and the petitioner's filed returns. The respondent had reversed input tax credit amounts for each assessment year - Rs. 21,552/-, Rs. 1,19,210/-, and Rs. 21,041/- respectively. The petitioner argued that the reversal of input tax credit based on information mismatch was unjustified. They cited the judgment in Althaf Shoes (P) Ltd., Vs. Assistant Commissioner (CT), where it was held that such discrepancies cannot be the sole reason for credit reversal. Additionally, the petitioner contended that penalty under Section 27(3) could only be imposed in cases of income escapement. They relied on the judgment in Nokia India Private Ltd., Vs. Deputy Commissioner (CT)-IV, which supported their stance. In response, the respondent's counsel referenced the judgment in Althaf Shoes (P) Limited Vs. Asst. Commissioner (CT) to justify the information mismatch issue. Regarding the penalty, the respondent conceded that penalty under Section 27(3) could only be imposed if the case fell within Section 27A of the 2006 Act. After considering the arguments and records, the Court concluded that the impugned orders were to be set aside. The respondent was directed to redo the assessment, ensuring compliance with the law and the referenced judgments. Consequently, the writ petitions were disposed of, and pending applications were closed without any cost orders.
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