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2020 (12) TMI 1168 - HC - VAT and Sales TaxDemand of differential amount of tax due with interest and penalty - Verification of the sales transactions of the Petitioner during the year 2014-2015 - HELD THAT - The issue decided 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 concerned assessing officer shall issue fresh show cause notice with all required details in respect of levy of tax for mismatch invoices and the Petitioner shall be entitled to submit his explanation within the prescribed time. It is made clear that the Petitioner shall not be entitled to raise any plea of limitation when the fresh show cause notice is issued - It shall be incumbent upon the assessing officer to afford opportunity of hearing to the Petitioner following the prescribed procedure - petition allowed by way of remand.
Issues:
Challenge to Notice on sales transactions verification for differential tax payment. Analysis: The Writ Petition contested a Notice issued by the Respondent regarding the verification of sales transactions and claiming payment of differential tax with interest and penalty for the year 2014-2015. Reference was made to a previous judgment by the Court in J.K.M.Graphics Solution Private Limited -vs- Commercial Tax Officer, Chennai, where it was emphasized that a centralized mechanism should be established to handle cases of mismatch in tax returns. The Court directed the department to evolve a fair procedure to deal with discrepancies, ensuring dealers are given an opportunity to explain their position before any action is taken. Following this ruling, the Commissioner of Sales Tax issued Circular No. 3/2019 providing detailed instructions on how authorities should handle cases involving mismatch of Input Tax Credit (ITC) and other related issues. The Court, considering the legal position established by the previous judgment and the circular issued by the Commissioner of Sales Tax, set aside the impugned order. The assessing officer was directed to issue a fresh show cause notice to the Petitioner with all necessary details regarding the tax levy for mismatched invoices. The Petitioner was granted the opportunity to submit an explanation within the specified time frame, without the option to claim limitation when the new notice is issued. The assessing officer was mandated to follow the prescribed procedure, provide a hearing to the Petitioner, pass reasoned orders addressing all contentions raised, and communicate the decision in writing. In conclusion, the Writ Petition was disposed of based on the terms outlined in the judgment. The connected Miscellaneous Petition was closed without any costs imposed. The Court's decision emphasized the importance of a fair and centralized mechanism to handle cases of tax discrepancies, ensuring dealers are given a proper opportunity to present their case and have decisions made in accordance with the law.
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