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TMI Blog2019 (5) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... lers which is also extracted in the impugned assessment order. This being the case, the observation made by the respondent that the petitioner has accepted the wrong claim of ITC from the non-existing TIN Numbers i.e from cancelled dealers is absolutely incorrect. Mismatch claim - HELD THAT:- Since according to the respondent, the original tax invoices were not produced by the petitioner, the respondent has come to a wrong conclusion that the input tax credit has to be reversed on the ground of mismatch between the purchases reported by the petitioner and sales reported by the other end sellers - Under the impugned assessment order, a sum of ₹ 29,32,343/- towards reversal of input tax credit on account of mismatch was assessed by the respondents, which according to the considered view of this Court has been assessed by total non-application of mind - a penalty has also been assessed under Sections 27(3) and 27(4) of the TN VAT Act, 2006, which according to the considered view of this Court has also been passed by total non-application of mind. The impugned assessment order dated 30.11.2016 has been passed by the respondent by total non-application of mind and the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count received, the turn over disclosed by the petitioner in the monthly returns filed by them earlier is liable to be taxed at 4%; (c) Wrong claim of Input Tax Credit on inter state purchases; (d) Purchases from RC cancelled dealers: According to the respondent, as per section 19(16) of the TN VAT Act, 2006, claim of input tax credit in respect of purchases from RC cancelled dealers is liable to be taxed; and (e) Annual cross verification : According to the respondent on verification of annual cross verification report available in their departmental website, it was noticed that the petitioner claimed input tax credit on transactions but no entries were available in Annexure II of the other end dealer's returns. 5. According to the petitioner, two detailed replies, one dated 13.10.2015 and another dated 08.02.2016 were given as to why the respondents are not entitled to reverse the input tax credit claim made by the petitioner. In the said reply, according to the petitioner, detailed replies were sent on 13.10.2015 and 08.02.2016 by the petitioner,wherein they have stated - (a) There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailment of input tax credit by them. By Assessment order dated 30.11.2016, the respondent revised the assessment for the assessment years 2010-11, 2011-12, 2012-13 2013-14 by passing the following order: As rightly observed by the dealers, to claim input tax credit on the purchases, the tax paid by the purchasing dealer to the selling dealer in the form of tax invoice on their purchases, evidencing the tax paid is enough. However, in this case, the dealers without producing the original tax invoice, citing several judgment in their favour. Further, as requested by the dealers in their reply, invoice wise details of mismatch, through CD was given to the dealers which was received by them on 19.08.2016. Even after lapse of 3 months, the dealers failed to produce the original invoices. In view of the above facts and circumstances of the case, it is crystal clear that the dealers have no original tax invoices with them. In the absence of production of original tax invoices as required under the provisions of TN VAT Act, the reversal of claim of ITC on annual scrutiny to the tune of ₹ 29,32,343/- is confirmed. Further, levy of penalty under Section 27(4) is auto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Learned counsel for the petitioner also drew the attention of this Court to the observations recorded by the respondent insofar as the discount claim is concerned. It is pertinent to point out here that even though the dealers had given above statement, they have not produced any documentary evidences in support of their contention. According to the learned counsel for the petitioner, having produced the Profit and Loss Account as well as the original tax invoices, the aforesaid observations made by the respondent has been passed by total non-application of mind. 13. The learned counsel for the petitioner then drew the attention of this Court to a Division Bench judgments of this Court in the case of Assistant Commissioner (CT) Thiruverkadu Assessment Circle, vs., Infiniti Wholesale Ltd., reported in (2017) 99 VST 341 (Mad) and submitted that the petitioner, who is a purchaser cannot be held liable for the fault of the other end seller for non-filing of returns or for non-disclosure of sales to the petitioner. According to the learned counsel for the petitioner, as per the aforesaid judgment, the respondent cannot reverse the input tax credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the petitioner has not made use of those opportunities. A counter affidavit has been filed by the respondents. Since all the objections raised by the petitioner in the replies dated 12.10.2015 and 08.02.2016 were duly considered by the respondent, the only remedy available to the petitioner is to file a statutory appeal under Section 51 of the TN VAT Act, 2006 and therefore, according to the learned Additional Government Pleader, the writ petition is not maintainable. Discussion: 18. This Court has perused and examined the impugned Assessment Order. In the assessment proceedings, the petitioner has submitted the profit and loss account and has also furnished the original tax invoices in respect of the sales made by them from the other end sellers. But while dealing with the discount claim, the respondent has observed that the petitioner has not produced any documentary evidence in support of their contentions and has levied tax on the turnover of ₹ 14,82,362/- @ 4% as per the pre-revision notice sent by them. 19. This Court is of the considered view that the observation of the respondent that the petitioner has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal non-application of mind. 22. The judgments relied upon by the learned counsel for the petitioner in the cases of Infiniti Wholesale Limited Vs.Assistant Commissioner (CT) Koyambedu Assessment Circle, Chennai reported in (2015) 82 VST 457 as well as the judgment made in the case of JKM Graphics Solutions Private Limited vs Commercial Tax Officer, Vepery Assessment Circle, Chennai reported in (2017) 99 VST 343 (Mad) are squarely applicable to the facts of the instant case. 23. For the foregoing reasons, this Court is of the considered view that the impugned assessment order dated 30.11.2016 has been passed by the respondent by total non-application of mind and the same will have to be quashed. In the result, the impugned order dated 30.11.2016 is hereby quashed and the matter is remanded back to the respondents for fresh consideration and the respondent shall pass final orders after giving adequate opportunity to the petitioner to raise all objections available to them under law and also by granting them the right of personal hearing and the respondent shall pass final orders within a period of eight (08) weeks from the date of receip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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