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2022 (4) TMI 1352 - HC - VAT and Sales TaxMaintainability of petition - time limitation - whether the impugned order passed by the respondent on 07.03.2019 can be said to have been passed within the limitation prescribed u/s 27 of the TNVAT Act, 2006 - HELD THAT - The notice that was issued to the petitioner on 10.10.2018 merely states that a cross verification of the check post data of the department reveal that the petitioner had purchased the goods from the outside of the State. A dealer paying tax under Section 6(1) of the Tamil Nadu Value Added Tax Act, 2006 should not purchase goods from the other States and effect sales. Hence, Section 6(1) of the Act, does not apply and therefore, notice proposed to levy tax under Section 5 of the Tamil Nadu Value Added Tax Act, 2006 at 14.5% - Pursuant to the impugned order dated 07.03.2019, a notice of assessment and demand in Form 'O' was also issued calling upon the petitioner to pay the aforesaid tax of ₹ 24,18,434/-. Similarly, the notice of interest under Rule 16(5) of the TNVAT Rules, 2007 in Form 'RR' was issued on 07.03.2019 and thereafter, the petitioner was called upon to pay the aforesaid penalty of ₹ 39,01,499/-. In the present case, the notice has been issued in time for revising the assessment and therefore, to that extent, the initiation of the proceedings cannot be questioned. However, the demand is based on the data in the web portal of the respondent. Though the Circular No.5 of 2021 bearing reference No.LW10/12521/2016, dated 24.02.2021 is for mismatch in ITC claim, the method devised therein can be used to co-relate the purchase and sales turnover of a dealer and can be applied to the petitioner's case mutatis mutandis. The case is remitted back to the respondent to pass fresh order, within a period of three months from the date of receipt of a copy of this order - petition disposed off.
Issues:
1. Whether the impugned order was passed within the limitation prescribed under Sections 27 of the TNVAT Act, 2006? 2. Whether the notice issued for revising the assessment was within the period of limitation? 3. Whether the petitioner's Writ Petition should be quashed based on the limitation issue? 4. Whether the notice issued under Section 22(4) of the TNVAT Act, 2006 was valid and not time-barred? 5. Whether the tax assessment and penalty imposed were justified and lawful? 6. Whether the decision in Tvl.Victus Dyeings case applies to the present case? 7. Whether the method devised to deal with discrepancies between declared turnover and web portal data is applicable in this case? Analysis: 1. The Writ Petition was filed to challenge the respondent's proceedings and quash the same on the grounds of limitation under Section 27 of the TNVAT Act, 2006. The petitioner argued that the notice for revising the assessment was issued beyond the prescribed period, rendering it time-barred. The petitioner relied on specific language in Section 27(1) to support the claim that the impugned order dated 07.03.2019 was passed after the expiry of the limitation period. 2. The respondent contended that the notice dated 10.10.2018 was issued under Section 22(4) of the TNVAT Act, 2006, not Section 27(1), and thus the limitation under Section 27(1) did not apply. The respondent argued that the initiation of revision proceedings was done within the statutory timeframe, refuting the petitioner's claim of being time-barred. The Court analyzed the dates involved and concluded that the notice was issued in time for revising the assessment. 3. The Court considered the arguments from both parties and examined the notice issued on 10.10.2018, which highlighted discrepancies in the petitioner's tax payments and purchases. The revised assessment order dated 07.03.2019 increased the taxable turnover, resulting in additional tax liabilities and penalties. The Court found that the notice was not time-barred and upheld the assessment and penalties imposed under Section 22(5) of the TNVAT Act, 2006. 4. The petitioner referenced a previous court decision and various legal cases to support their argument regarding the limitation issue. However, the Court distinguished the facts of the present case from the cited cases, emphasizing that the notice in this instance was issued within the prescribed timeframe for revising the assessment. 5. The Court also discussed a circular issued to address discrepancies between declared turnover and web portal data. While the circular primarily dealt with ITC claims, the Court found the methodology applicable to the petitioner's case. Consequently, the Court set aside the impugned order and remitted the case back to the respondent for a fresh assessment within a specified timeframe, ensuring the petitioner's right to be heard in the process. 6. Ultimately, the Writ Petition was disposed of in line with the Court's directions, with no costs imposed. The connected Miscellaneous Petition was closed accordingly, concluding the legal proceedings in this matter.
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