2023 (8) TMI 933 - HC - VAT and Sales Tax

Validity of assessment orders - demand under Section 19(2)(v) of the TNVAT Act - Invisible loss - Deficit stock - HELD THAT - It was incumbent on the part of the assessee as also the revenue to have to applied for a modification of the aforesaid order. It however went unnoticed. The revenue was under the assumption that the amount stood confirmed as far as deficit stock issue was concerned while the petitioner has assumed the issue all the issues were answered as the impugned orders were set aside and case was remitted back. The Department also did not choose to issue further prerevision notice on deficit stock which culminated in the subsequent orders. The issue relating to the stock deficit has not been addressed after the order was set aside by this Court on 18.09.2017 in W.P.Nos.16000 to 16004 of 2017 on account of the confusion that prevailed. Be that as it may the issue has been alive in these proceedings all through though the other two issue have been settled in favour of the petitioner and have been dropped. As far as deficit stock is concerned it has be construed that the issue is still alive. Neither the Department can be deprived of the revenue if the amount was payable by the petitioner nor the petitioner deprived of a chance to defend itself. The case is remitted back to the respondent to pass a fresh order as far as deficit stock is concerned - Petition disposed off.

Summary

Issues involved: Challenge to recovery notice, assessment orders for different years, demand under TNVAT Act, invisible loss, deficit stock.

Challenge to recovery notice: The petitioner challenged the recovery notice issued by the 1st respondent, which led to the 3rd round of litigation before the Court.

Assessment orders for different years: The petitioner had assessment orders for the years 2012-2013, 2013-2014, and 2015-2016, with issues related to demand under the TNVAT Act, invisible loss, and deficit stock.

Demand under TNVAT Act: The demand under Section 19(2)(v) of the TNVAT Act was a subject matter of the assessment orders and subsequent litigation.

Invisible loss: The assessment orders and litigation focused on the correctness of the percentage of loss of materials (invisible loss) as computed by the respondent.

Deficit stock: The issue of deficit stock was also raised, leading to confusion and subsequent litigation regarding its treatment in the assessment orders.

Court's observations: The Court noted that previous orders had set aside assessment orders and remitted the case back to the respondents for fresh orders, emphasizing the importance of addressing all issues properly.

Decision: The Court quashed the impugned recovery notices and remitted the case back to the respondent to pass a fresh order specifically addressing the deficit stock issue, ensuring both the revenue's interest and the petitioner's right to defend themselves.