2019 (6) TMI 939 - HC - VAT and Sales Tax

Deemed assessment - validity of assessment order - Section 22(2) of TNVAT Act - imposition of tax on turnover - service of notice to petitioner - HELD THAT - The issue covered in the case of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER 2017 (3) TMI 536 - MADRAS HIGH COURT where it was held that this Court is fully convinced that the procedure adopted by the respondent, Assessing Officers in all these cases are half baked attempts, which have not yielded results and these cases are before this Court or before the Appellate Authorities and all that the Assessing Officers can record is that they have issued show cause notices or passed orders reversing the Input Tax Credit with no appreciable impact on the revenue collection. The case of JKM Graphics Solutions is now governing the field and the procedure of making an assessment with regard to an assessee by relying on details in the websites and web portals of other entities / individuals is incorrect besides being unsafe. Therefore, it follows as a further sequitur that the writ petitioner is entitled to have the impugned order set aside on the ground that it is in violation of JKM Graphics Solutions Private Limited principle - the immovable property belonging to the petitioner has been attached pursuant to the assessment After submission of new methodology /module for assessment before learned single Judge, which this Court is informed is being done in the course of ensuing week, respondent shall make assessment afresh - Attachment of immovable property made vide proceedings dated 20.02.2013 shall continue to remain until adjudication and assessment afresh - petition allowed by way of remand.

Summary

Issues:
1. Assessment under the Tamil Nadu Value Added Tax Act, 2006.
2. Discrepancies in assessment based on comparison with details from other entities' websites.
3. Dispute regarding service of notices and attachment of property.
4. Application of the judgment in M/s.JKM Graphics Solutions Private Limited case to the present case.

Analysis:
1. The judgment concerns a writ petition under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act). The petitioner, a sole proprietor of a business, challenged an assessment order made by the respondent. The assessment included discrepancies found by comparing the petitioner's returns with details from other entities' websites, resulting in a tax imposition and penalty. The petitioner disputed the assessment and the attachment of immovable property based on alleged lack of proper service of notices.

2. The assessment order was challenged primarily on the grounds of the procedure adopted by the respondent, relying on information from other entities' websites for reassessment. The petitioner argued that this method was unsafe and cited a judgment from a similar case, M/s.JKM Graphics Solutions Private Limited. The court acknowledged the relevance of the cited judgment, emphasizing the need for a centralized mechanism to handle discrepancies before calling upon the dealer to explain, to avoid multiple proceedings and protect revenue interests.

3. The dispute regarding the service of notices and the attachment of property was raised by the petitioner, claiming that the business was not operational at the address mentioned in the notices. The court refrained from delving into the factual aspects due to the nature of the writ petition but noted the petitioner's contentions. The court ordered the setting aside of the impugned assessment order and continuation of the property attachment pending reassessment.

4. The judgment in M/s.JKM Graphics Solutions Private Limited case was applied to the present case, leading to the setting aside of the assessment order. The court directed the respondent to submit a new assessment methodology as recommended in the cited judgment, ensuring a fair assessment process. The court ordered a fresh assessment to be conducted within three months of the new module becoming operative, with automatic release of the property attachment if the assessment favored the petitioner.

In conclusion, the court allowed the writ petition, setting aside the assessment order and providing directions for a fair reassessment process in line with the principles outlined in the M/s.JKM Graphics Solutions Private Limited case.