2017 (3) TMI 115 - HC - VAT and Sales Tax

Input tax credit - reversal on the ground that there was mismatch in information which was available on the departmental website, as against that, which was reflected in the monthly returns filed by the petitioner - whether mere mismatch in information could form the basis of reversal of ITC? - Held that - mere mismatch in information could not have formed the basis of reversal of ITC - reliance placed in the case of Murugan Garments Versus The Assistant Commissioner (CT) (FAC) 2017 (3) TMI 47 - MADRAS HIGH COURT - respondent is directed to re-work the assessment - petition allowed by way of remand.

Summary

Issues:
Challenge to order dated 29.11.2016 regarding taxable turnover and Input Tax Credit (ITC) for assessment year 2014-15.

Analysis:
The petitioner challenged an order passed by the respondent concerning the addition to taxable turnover due to unaccounted purchases and reversed ITC based on a mismatch in information. The respondent levied taxes amounting to &8377; 7,903/- and &8377; 7,45,746/- for the respective aspects. The petitioner contested the second aspect, arguing that a mere mismatch in information should not lead to ITC reversal. The petitioner referred to a previous order in a similar case to support this argument. The respondent acknowledged the issue but cited previous court judgments supporting their position.

The court focused on the second aspect of the challenge, whether a mere mismatch in information justified ITC reversal. The court noted that this issue was addressed in a previous order dated 05.01.2017. Consequently, the court set aside the impugned order and directed the respondent to reassess the situation considering the previous order and related judgments. The respondent was instructed to provide a personal hearing to the petitioner and necessary information before making a fresh assessment. The court disposed of the writ petition based on these directions, closing connected applications without any cost orders.