2019 (3) TMI 508 - HC - VAT and Sales Tax

Direction to furnish the records in support of the alleged purchases effected - innocuous prayer - It is the case of the petitioner that he does not know the alleged seller of the goods and further, it is his case that the alleged sale transaction is said to have taken place during the time when his mother was alive and was the Proprietrix of the business. Held that - The prayer sought for by the petitioner is only to cross examine the seller and transporter of the goods, which were allegedly purchased in the years 2009-2010, 2010-2011 & 2011-2012 respectively, during the time when the petitioner s mother was alive and was the Proprietrix of the business. The respondent, being the State, are also interested in finding out the truth. That being the case, this Court is of the considered view that no prejudice will be caused to them if the prayer sought for in this writ petition is granted to the petitioner. This Court directs the respondent to furnish the records in support of the alleged purchases effected in the years 2009-2010, 2010-2011 & 2011-2012 respectively to the petitioner and issue summons to the third parties, who had sold the goods to the petitioner for producing the records and permit the petitioner to conduct the cross examination of the third parties and conduct a detailed inquiry before proceeding - petition disposed off.

Issues involved:
1. Mandamus to direct the respondent to furnish records and issue summons for alleged purchases.
2. Conduct cross-examination of third parties and detailed inquiry before revision notice.
3. Denial of liability for tax and penalty based on alleged purchases.
4. Request for verification of accounts of alleged seller and relief from demand.
5. Necessity of summoning and cross-examining seller of goods for proof of liability.
6. Legal provisions allowing summoning and examination of persons in tax matters.
7. Opportunity for petitioner to cross-examine seller to ascertain truth.
8. Pending proceedings and prayer for cross-examination of seller and transporter.
9. No prejudice to State if prayer for cross-examination is granted.

Analysis:
The petitioner filed writ petitions seeking Mandamus to direct the respondent to provide records and issue summons for alleged purchases. The petitioner's mother, a dealer in Stationery and Tobacco products, passed away, and the business changed to a partnership firm before ceasing to exist. The petitioner then started a new business. The respondent sent notices alleging unreported cigarette purchases and proposed penalties, which the petitioner denied liability for, citing lack of connection to the purchases made during his mother's tenure. The petitioner requested verification of seller accounts and relief from demand, as he lacked possession of old records.

The petitioner emphasized the impossibility of significant purchases during the stated period, given his involvement in the business only after his mother's demise. The petitioner's counsel highlighted the need for cross-examination of the alleged seller to establish the truth, citing Section 81 of the TN VAT Act empowering authorities to summon and examine individuals. The respondent sought time to confirm pending proceedings, indicating the petitioner's lack of familiarity with the alleged seller and the necessity to cross-examine for clarity.

The court acknowledged the petitioner's prayer to cross-examine the seller and transporter of goods from the period when his mother managed the business. Recognizing the State's interest in uncovering the truth, the court directed the respondent to provide records, issue summons to third parties, allow cross-examination, conduct a detailed inquiry, and grant a personal hearing before finalizing the revision notice. The court found no prejudice in granting the petitioner's request and disposed of the writ petitions with no costs, ensuring fairness and due process in the proceedings.

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