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TMI Blog2018 (6) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... oner's selling dealer has not remitted the tax collected into the Government Treasury. This cannot be a reason for reversing the Input Tax Credit, as held by this Court in Sri Vinayaga Agencies Vs. Assistant Commissioner (CT), Vadapalani [2013 (4) TMI 215 - MADRAS HIGH COURT] - denial of credit unsustainable. Stock variation - The respondent has failed to take note of any of the objections filed by the petitioner in their reply dated 10.01.2018 - Held that:- The respondent merely proceeded on the basis that the defects were admitted during the course of inspection. This finding is illegal and not sustainable - The respondent, being a statutory authority, is bound to consider the objections filed by the petitioner and the documents produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out in the notice dated 21.12.2017, namely 1) There is a mismatch noticed in the Department Web portal; and 2) Stock variation was noticed at the time of inspection. 3. The respondent alleged that the purchase details of the petitioner and their claim for Input Tax Credit when verified with reference to the sellers sales details as in the annextures I and II, as shown in the Departmental website, there were mismatch of entries noted and consequently proposed to reverse the Input Tax Credit availed by the petitioner to the tune of ₹ 8,46, 598/-. The petitioner filed their reply dated 10.01.2018. While denying the said allegation, the petitioner pointed out that they have duly furnished all particulars in their monthly re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the inspection done by the Sales Tax Department on 23.09.2015 to 28.09.2015 and pointed out that because of the huge quantity of items, it is impossible to take stock correctly and accurately in one day. Further it is stated that the inspecting officials arrived at a stock value based on assumption that all their products are taxable at 14.5%. However, if the purchase details were verified, it will clearly indicate that those items were under exempted category, tax payable at 5% and tax payable at 14.5%. While stating that there could be variation in the stock value taken by the inspecting officers with the stock maintained by the computer inventory software, the method of taking the gross profit margin from the last year is incorrec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly denied the Input Tax Credit in respect of those transactions. Further, the petitioner, who has not objected the stock difference noticed at the time of inspection, cannot challenge the equal addition now made in the order as well as levy of penalty. Thus, the respondent, in effect, state that the petitioner have not objected to the stock difference before the inspecting team and therefore, they are estopped from now raising such a contention. 7. After elaborately hearing the learned counsel for the parties and carefully perusing the materials placed on record including the counter affidavit filed by the respondent, it has to be seen as to whether the manner in which the impugned Assessment made is legally sustainable. 8. So far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first paragraph of the notice. This is an incorrect way of reading a judgment. Ratio decidendi of a particular judgment or oder has to be taken note of and the respondent cannot state that it will be applicable only to the parties inter se in the said order. Thus, applying the decision in Sri Vinayaga Agencies Vs. Assistant Commissioner (CT), Vadapalani, denial of Input Tax Credit to the tune of Rs..45,427/- is unsustainable in law and therefore, the same is to be set aside. 9. Moving on to the next issue, i.e., relating to stock variation, the respondent has failed to take note of any of the objections filed by the petitioner in their reply dated 10.01.2018. The respondent merely proceeded on the basis that the defects were admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of ₹ 45, 427/- is set aside and the respondent is directed to extend the said benefit to the petitioner. 2) The finding with regard to stock variation and demand of tax is set aside and the same is remanded to the respondent for fresh consideration. The respondent is directed to afford an opportunity of personal hearing to the petitioner and consider the objections filed by the petitioner and the document that the dealer may produce and redo the assessment in the light of the reasons assigned in the preceding paragraphs. There is no case of making an equal time addition or levy penalty. Accordingly, the same is set aside. No costs. Consequently, the connected miscellaneous petitions are closed. - - TaxTMI - TMITax - C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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