2024 (1) TMI 1017 - HC - VAT and Sales Tax

Validity of an assessment order - notices issued under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) - reversal of ITC - HELD THAT - Rule 10(2) of the TNVAT Rules mandates production of the original tax invoices. On this issue, however, learned counsel for the petitioner asserts that the petitioner has all the original tax invoices in its custody and would produce the same for inspection by the Assessing Officer. The third finding relates to alleged non-submission of the purchase ledger account. Regarding this submission, learned counsel for the petitioner pointed out that the relevant ledger accounts were provided. The conclusion that follows is that the Assessing Officer did not duly consider documents such as invoices, declaration letters and bank statements, which were provided by the petitioner, and thereafter indicate as to why those documents do not adequately satisfy the requirement of establishing the genuineness of purchase in respect of the ITC claim - these writ petitions are disposed of by remanding these matters for re-consideration by the Assessing Officer.

Summary

Issues involved:
Assessment order under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 challenged by the petitioner regarding Input Tax Credit (ITC) claims.

Summary:

Assessment of ITC claims:
The petitioner, a registered dealer under the TNVAT Act, received a show cause notice pointing out defects in ITC claims. While defects 1 to 3 were resolved, defect 4 concerning ITC reversal on unaccounted purchase bills remained. The demands for ITC reversal for different assessment years were specified in the notice.

Submission of documents:
The petitioner responded to the notice by providing sample invoices, ledger accounts, declaration certificates, and additional documents at various stages. Despite the submission of relevant documents, further show cause notices were issued, leading to the impugned assessment orders.

Contentions and findings:
The petitioner argued that the impugned orders did not consider the documents submitted, leading to an unsustainable finding regarding the genuineness of transactions. The government pleader contended that the dealer must establish transaction genuineness by producing original tax invoices, which were not provided by the petitioner.

Judgment and reasoning:
The Court found that the assessing officer did not properly evaluate the documents submitted by the petitioner to establish the genuineness of purchases for ITC claims. Consequently, the impugned orders were quashed, and the matters were remanded for re-consideration. The petitioner was granted two weeks to submit all supporting documents, including original tax invoices, for fresh assessments to be completed within four weeks thereafter. No costs were awarded in the matter.