Deferred recovery pending revision under VAT law where disputed tax challenge must be heard before enforcement

Pending statutory revision under the Tamil Nadu Value Added Tax Act, 2006, implementation of a revised assessment order may be deferred where the assessee has already pursued appellate remedies and further challenge is proposed. Section 42(3) and its second proviso indicate that interest on the disputed amount and consequential recovery should remain postponed until the appeal or revision is finally decided. Applying that approach, the Court preserved the assessee's remedy and directed deferment of action on the impugned order until the proposed revision is filed and disposed of.

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Issues: Whether implementation of the impugned assessment order could be deferred pending disposal of the revision proposed to be filed by the assessee under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The assessment had already been revised and the assessee had carried the matter in appeal and further challenge before the revisional forum was proposed. Section 42(3) of the Tamil Nadu Value Added Tax Act, 2006, and its second proviso, contemplate postponement of interest in respect of the disputed amount until disposal of the appeal or revision and indicate that consequential recovery should await the final decision in the statutory challenge. In these circumstances, the Court found it appropriate to preserve the assessee's remedy and defer action on the impugned order until the revision is filed and decided.

Conclusion: The Court directed deferment of implementation of the impugned order until disposal of the proposed revision, which is in favour of the assessee.

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