2018 (4) TMI 414 - HC - VAT and Sales Tax

Validity of assessment order - TNVAT Act - short payment of tax treating the galvanizing as works contract - availment of input tax credit on ineligible rules - non-payment of TDS, as per section 13 of the Act, on construction of the building - Held that - there cannot be a combined notice for submitting objections as well as personal hearing. This is so, because, if, on objections being filed by the petitioner, if the assessing officer is fully convinced with the objections, he may not be required to examine the dealer at all and he may drop the proceedings. However, if there is any clarification to be given, then the assessing officer will issue notice directing the dealer to appear before him, on an appointed date and give his explanation. This procedure has not been adopted by the respondent for both these assessment years (2010-11 and 2011-12). The matters are remanded back to the respondent, for fresh consideration - petition allowed by way of remand.

Summary

Issues:
1. Challenge to assessment orders for the years 2009-10, 2010-11, and 2011-12.

Analysis:
1. The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged assessment orders for the years 2009-10, 2010-11, and 2011-12. The assessment order for 2009-10 was set aside due to a revised notice issued by the respondent, allowing the petitioner to submit objections within a specified timeframe. The assessment orders for 2010-11 and 2011-12 were also contested.

2. For the assessment order of 2010-11, issues included short payment of tax on galvanizing works treated as a works contract, ineligible input tax credit availed, and non-payment of TDS on building construction. Similarly, for the assessment order of 2011-12, issues involved short payment of tax on galvanizing works, non-payment of TDS on building construction, failure to report sale of scraps, treating transport charges as pre-sale expenses, and failure to reverse ITC as required by law.

3. The petitioner provided detailed explanations for the galvanizing works, arguing it was job work and not a works contract. However, the respondent's handling of objections was found lacking, as a specific date for personal hearing was not fixed as per Circular No. 7 of 2014. The court emphasized the importance of separate notices for objections and personal hearings, citing a previous case where assessment orders were set aside due to procedural errors.

4. Consequently, the court set aside the assessment orders for 2010-11 and 2011-12, directing the matters to be remanded back to the respondent for fresh consideration. The respondent was instructed to fix a specific date for personal hearing, consider objections and redo the assessments for all three years in accordance with the law. No costs were awarded, and the related Writ Miscellaneous Petitions were closed.