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TMI Blog2015 (1) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... T Rules). 3. The petitioner would state that it pay to its vendors the price as well as the tax charged and take Input Tax Credit (in short ITC ). It is stated that during the relevant assessment year, a small portion of the purchases were made by the petitioner from registered dealers, outside the State of Tamil Nadu and those purchases were made, as purchases contemplated under Section 8 (1) of the Central Sales Tax Act, 1956, and the petitioner has effected resale within the state of Tamil Nadu and paid tax. The petitioner would state that on the inter-state purchases, it has not taken input tax credit. 4. The respondent has issued a notice, dated 20.07.2012, stating that, on verification of the returns filed by the petitioner for the assessment year 2011-12, certain defects were noticed, which are briefly stated as here-under:- "(i) There is short reporting of turnover by the registered vendors of the petitioner in comparison to the purchase turnover of the petitioner to the tune of Rs. 3,37,50,298/-; (ii) The vendors who are registered dealers have not filed returns for Rs. 66,784/-; (iii) The vendors have not paid tax and yet petitioner has taken credit (termed as non as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 28.01.2013, by speed post, stated to have been received by the respondent, on 30.01.2013. While the facts stood thus, the respondent has passed the impugned assessment order, dated 25.02.2013. 9. The learned counsel for the petitioner, after elaborately referring to the facts, submitted that, since the petitioner has furnished confirmation to the tune of Rs. 2,60,92,645/- from its vendors, the respondent ought to have dropped the proposal to that extent and this submission was made, without prejudice to the contention that the impugned assessment order suffers from error apparent on the face of the record, as it wholly ignores Section 19 (1) of the VAT Act. Further, it is submitted that the action of the respondent is arbitrary, as no cross verification was done, despite repeated requests. Further, it is submitted that the impugned order is bad in law, as no show cause notice was issued to the petitioner, as contemplated under Section 27 of the VAT Act and there was only one notice and that was prior to the amendment to Section 22 of the VAT Act. Further, it is submitted that no reasonable opportunity was granted to the petitioner and the respondent failed to follow the proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3,73,69,691/- the petitioner has produced evidence for Rs. 2,60,92,645/- only and in respect of the remaining turnover the petitioner has not produced any documentary evidence. Therefore, it is submitted that the onus is on the petitioner to prove its claim, in terms of Section 17 of the VAT Act. On the above grounds, the learned Additional Government Pleader seeks to sustain the impugned order of assessment. 12. The petitioner has filed a reply affidavit, to the counter affidavit filed by the respondent, denying the allegation that the vendors of the petitioner are unregistered dealers and stating that all local vendors are registered dealers and one of the vendors, whom the respondent alleges to be a unregistered dealer is Whirlpool India and the departmental web-page itself indicates that Whirlpool India is a registered dealer and their Registration Certificate is valid. Therefore, it is stated that the impugned proceedings are outcome of total non-application of mind. The request made by the petitioner seeking the assistance of the Department to provide reconciliation for the balance figure has been reiterated in the reply affidavit. Further, it is stated that the confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its records, and the petitioner is not able to reconcile the disputed amount, as contained in the notice, and requested for exact details of the transactions, in relation to which the mismatch has been alleged, so as to enable it to provide satisfactory response. Despite such a stand, the ledger confirmation received from the parties (vendors) were furnished with the request to take them on record. 17. Further, it was pointed out that the petitioner has claimed ITC based on valid tax invoice issued by the seller and it is not on account of any default on their part that the ITC has been proposed to be reversed. Therefore, considering the confirmations received from its business partners, a request was made to the respondent to go through the details and advise the petitioner about the further course, by enclosing the copy of such confirmation letters received from various organizations, such as, M/s.Videocon, M/s.Carrier, M/s.Fugi Film, M/s.Hindustan Lever Limited, M/s. Preethi Kitchen Appliances Pvt. Ltd., M/s. Premier Elmech Systems Pvt. Ltd., M/s.Sharp Business Systems India Ltd., M/s. Symphony Ltd., M/s.Karbon Mobiles, M/s.Optimimus Infracom Limited, etc., Subsequently, anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s / evidence for payment of tax to the tune of Rs. 2,60,92,645/- as against the alleged amount of Rs. 3,73,69,691/-. If that be so, it is not known as to why the Assessing Officer has failed to take note of the evidence produced and give credit to the same, while finalizing the assessment. Having accepted that the documents were received from the petitioner, the respondent has made a false statement in the assessment order stating that the petitioner / dealer has not produced any document. Therefore, the assessment order is arbitrary and stands vitiated. 21. Further, it is to be pointed out that the show cause notice itself is vague. Be that as it may, the petitioner, while submitting its reply, has stated that the petitioner is ready to produce the necessary verification certificates from its vendors, though there is no such statutory requirement. In respect of matters, where they had no access to the vendors' accounts they sought assistance of the respondent. This request, which appears to be a reasonable request, was not considered by the respondent. 22. In the case of Althaf Shoes (Pvt) Ltd., cited supra, the petitioner was a dealer and exporter of finished leather and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it was held that at the time of filing the self-assessment return under Section 22 (2), the petitioner-dealer had followed Rule 10 (2) of the Tamil Nadu Value Added Tax Rules, 2007, and therefore, could not be said to have wrongly availed of input tax credit wrongly. Section 19 (1) states that input-tax credit can be claimed by a registered dealer, if he establishes that the tax due on such purchase has been paid by him in the manner prescribed and that was accepted at the time when the self-assessment was made. The pre-revision notices and the orders clearly stated that the petitioner-dealer had paid the tax to the selling dealer. If that be the case, it was held that the petitioner's case therein squarely fell under the proviso to Section 19 (1) of the Act. Further, it was another matter that the selling dealer had not paid the collected tax. The liability had to be fastened on the selling dealer and not on the petitioner-dealer which had shown proof of payment of tax on purchases made. The orders were thus set-aside. 24. This Court is of the view that the above referred to decisions squarely cover the case on hand. The only conclusion that could be arrived is the ITC avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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