2019 (6) TMI 804 - HC - VAT and Sales Tax

Validity of assessments under TNVAT Act - it was alleged that the turnover reported by the petitioner in the returns and the turnover prepared by the petitioner s Auditor are not in tandem and that there is variation in numbers - HELD THAT - The respondent dropped proceedings under two heads and held as against the petitioner with regard to only one head this Court is of the considered view that it would be appropriate to relegate the writ petitioner to appeal remedy which is admittedly available to the petitioner. If the petitioner chooses to file an appeal before the appellate authority against the impugned order the appellate authority shall hear and dispose of the same in a manner known to law uninfluenced by and untrammelled by any of the observations that have been made in this order. Whatever is contained in this order are only for the purpose of disposal of the instant writ petitions and the Appellate Authority shall dispose of the appeal on its own merits and in a manner known to law if the petitioner chooses to avail the same - Petition disposed off.

Summary

Issues involved:
Assessments under 'The Tamil Nadu Value Added Tax Act, 2006' for multiple years, discrepancies in turnover reported by the petitioner, incorrect claim of 'Input Tax Credit', purchase suppression, purchase and sales omission, interest component, availability of statutory appeal, consideration of alternate remedy under Article 226 of the Constitution of India.

Analysis:
The judgment by the Madras High Court concerns four writ petitions related to assessments under 'The Tamil Nadu Value Added Tax Act, 2006'. The main issue revolves around discrepancies in turnover reported by the petitioner for different assessment years. The respondent raised concerns about the variation in numbers between the turnover reported by the petitioner in returns and that prepared by the petitioner's Auditor. The orders issued by the respondent on March 30, 2019, are challenged in these writ petitions.

The respondent's orders focused on three key issues: incorrect claim of 'Input Tax Credit', purchase suppression, and purchase and sales omission. The respondent accepted the petitioner's submissions regarding 'Input Tax Credit' and purchase suppression but ruled against the petitioner concerning purchase and sales omission. Specifically, the respondent highlighted discrepancies in sales figures disclosed in the profit and loss statement, leading to a confirmed difference in sales turnover.

Regarding the interest component, the petitioner contested its imposition, while the Revenue argued that interest is automatic and unavoidable. It is acknowledged that a statutory appeal lies with the Appellate Deputy Commissioner-Sales Tax (ST), Salem against the impugned orders. The court deliberated on the availability of alternate remedies and the necessity of predeposit of a percentage of the disputed amount for pursuing the statutory appeal.

The court cited legal precedents emphasizing that while alternate remedy is generally a rule of discretion, exceptions exist where specific conditions are met. These exceptions include lack of jurisdiction, violation of natural justice principles, and the ineffectiveness of the alternate remedy. In this case, the court determined that the petitioner should pursue the available appeal remedy, given the circumstances where the respondent dropped proceedings under two issues but ruled against the petitioner on one. The court directed the petitioner to avail the appeal remedy, ensuring a fair and unbiased hearing by the Appellate Authority.

In conclusion, the writ petitions were disposed of with the directive for the petitioner to pursue the appeal remedy, maintaining that the observations made in the judgment are solely for the purpose of these writ petitions. The court also allowed the petitioner to seek condonation of delay and benefit from Section 14 of the Limitation Act if necessary for filing the appeal before the Appellate Authority.