2017 (8) TMI 1459 - HC - VAT and Sales Tax

Judgment sets aside Assessment order, emphasizes fair opportunity for defense

OM ELECTRICALS AND HARDWARES Versus DEPUTY COMMERCIAL TAX OFFICER, TINDIVANAM ASSESSMENT CHICLE, TINDIVANAM, VILLUFURAM

The Court allowed the Writ petition, setting aside the Assessment order under the Tamil Nadu Value Added Tax Act, 2006 for the year 2012-2013. The Court ... Validity of Assessment order for the year 2012- 2013 - TNVAT Act - revision of turnover based on an information obtained from the official website - taxes at the compounded rate u/s 3(4) of the Act denied - Held that:- The respondent has failed to appreciate the purpose and purport of the order of remand passed by this Court, in the earlier writ petition - The direction to furnish all relevant materials is with the specific purpose that the petitioner should have sufficient opportunity to rebut the same. This direction was issued by the Court, taking into consideration the specific stand of the petitioner that they have not effected any interstate purchases. Petition allowed. Issues:Challenge to Assessment order under Tamil Nadu Value Added Tax Act, 2006 for the year 2012-2013 based on interstate purchase transactions and tax payment options.Analysis:1. Challenge to Assessment Order: The petitioner challenged the Assessment order for the year 2012-2013 under the Tamil Nadu Value Added Tax Act, 2006. Initially, the petitioner contested the Assessment order dated 02.12.2016, which sought to revise the turnover based on alleged interstate purchase transactions. The petitioner maintained that they had not engaged in any interstate purchases. Consequently, the Court in an earlier case set aside the Assessment order and directed the respondent to reevaluate the matter, considering the petitioner's objections and providing an opportunity for a personal hearing.2. Failure to Provide Sufficient Opportunity: Despite the earlier court directive to furnish all relevant materials and allow the petitioner to rebut the allegations of interstate purchases, the respondent issued a notice enclosing certain details. The petitioner, in response, requested further information, including the opportunity for cross-examination of third-party records. The petitioner relied on a previous court decision to argue against assessment based on presumption and assumption. However, the respondent completed the assessment, emphasizing the burden of proof on the petitioner.3. Court's Observations: The Court noted that the respondent failed to grasp the purpose of the earlier remand order, which aimed to provide the petitioner with ample opportunity to counter the allegations of interstate purchases. The petitioner's request for an inquiry into transactions from a dealer in Puducherry and the opportunity to cross-examine relevant parties was disregarded by the respondent. The Court deemed the respondent's actions as unsustainable and directed them to gather comprehensive information, provide the petitioner with an opportunity to respond, and summon any other involved dealer for cross-examination before completing the assessment in accordance with the law.4. Conclusion: The Court allowed the Writ petition, setting aside the impugned order and instructing the respondent to conduct a thorough investigation, furnish all relevant information to the petitioner, allow for objections, and facilitate cross-examination if necessary. The judgment highlighted the importance of providing a fair opportunity for the petitioner to defend against the allegations and emphasized the need for a comprehensive assessment process in line with legal requirements.