2017 (10) TMI 543 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - rectification of assessment u/s 84 - purchase from Registration Certificate cancelled dealers - purchase omissions - assessment for the year 2014-15 - Held that - the respondent while completing the assessment pointed out that as per the web report, the registration was cancelled prior to the date of purchase and therefore, the Input Tax Credit claimed by the petitioner from registration cancelled dealer is liable to be reversed. The legal position which has been settled by this Court is that the retrospective cancellation of the registration cannot be a reason to deny Input Tax Credit for a purchasing dealer. There may be cases where a selling dealer might have suppressed the fact of cancellation of registration. So far as the purchase omission is concerned, the petitioner s explanation is that there is a small error in Annexure I filed by the petitioner wherein at Serial Nos.26 and 27, the name of the selling dealers had got interchanged, as a result of which there is a mismatch of the TIN Number. This being a factual position, the petitioner has to raise the same before the Assessing Officer for which liberty is granted to the petitioner to file an application under Section 84 of the Act - liberty to the petitioner to file an application under Section 84 of TNVAT Act - the assessment under the head purchase from registration cancelled dealer is set aside - appeal allowed in part.

Summary

Issues:
1. Challenge to assessment orders under Tamil Nadu Value Added Tax Act for Assessment Years 2010-11 and 2014-15.
2. Allegation of erroneous statements in assessment orders.
3. Denial of Input Tax Credit based on retrospective cancellation of registration.
4. Mismatch in annexures leading to purchase omission.

Analysis:
1. The petitioner, a registered dealer, challenged assessment orders for the years 2010-11 and 2014-15. For the year 2010-11, the petitioner claimed to have submitted necessary proofs with objections, but the respondent alleged non-submission. The court advised the petitioner to seek rectification under Section 84 of the Act for the said year due to the missed appeal deadline.

2. Regarding the assessment for 2014-15, two issues were raised: purchase from Registration Certificate cancelled dealers and purchase omissions. The court clarified that denial of Input Tax Credit based on retrospective cancellation of registration is not valid as it may be due to selling dealer's suppression. The petitioner was granted liberty to rectify the mismatch in annexures leading to the purchase omission by filing an application under Section 84 of the Act.

3. In conclusion, W.P.No.22719 of 2017 was disposed of, allowing the petitioner to file an application under Section 84 of the Tamil Nadu Value Added Tax Act within 10 days. The respondent was directed to consider the application, provide a reasoned order within two weeks of the personal hearing, and refrain from coercive actions. W.P.No. 22720 of 2017 was partly allowed, setting aside the assessment under the head of purchase from a registration-cancelled dealer and granting the petitioner liberty to rectify the purchase omission within 10 days, with similar procedural directions as the previous case. No costs were awarded, and connected miscellaneous petitions were closed.