Petition challenging TNVAT notice dismissed, emphasizes due process

The High Court dismissed the petitioner's challenge to a notice under the TNVAT Act for excess claim of ITC and penalty, instructing the petitioner to first file objections with evidence before the respondents. The Court granted two weeks for the petitioner to submit objections and four weeks for the respondents to review and decide on the matter, emphasizing that challenging a notice without following due process does not warrant a writ petition unless fundamental rights are violated or principles of natural justice are not followed. No costs were awarded, and the Miscellaneous Petition was closed.

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Issues:
Challenge to notice issued under TNVAT Act for excess claim of ITC and penalty.

Analysis:
The petitioner, a Pharmaceutical Company, challenged a notice from the first respondent regarding the reversal and recovery of an excess claim of Input Tax Credit (ITC) under the Tamil Nadu Value Added Tax Act (TNVAT Act) and the imposition of a penalty. The petitioner claimed entitlement to input tax for purchases made from a seller, Bharath Pharma, before its entity changed to a Private Limited in September 2010. The petitioner contended that they verified the seller's authenticity through the Commercial Tax Department's website and disputed the cancellation date of the seller's Registration Certificate. The respondents alleged that the petitioner should reverse the tax benefit claimed due to the seller's canceled Registration Certificate. The petitioner argued that they cannot be held responsible for the seller's actions and that the notice was issued after a significant delay of eight months.

The High Court emphasized that challenging a notice without filing objections as required does not warrant a writ petition under Article 226 unless fundamental rights are violated, principles of natural justice are not followed, or the notice is ultra vires the relevant Act/Rules. The Court deemed the petitioner's challenge to the notice premature, instructing them to first file objections with necessary evidence before the respondents. The Court disposed of the Writ Petition, granting the petitioner two weeks to submit objections with supporting documentation and giving the respondents four weeks to review and decide on the matter in accordance with the law. No costs were awarded, and the Miscellaneous Petition was closed.

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