2016 (12) TMI 8 - HC - VAT and Sales Tax

Court orders re-consideration of assessment process, emphasizes fair review & evidence verification

M/s. Hotel Palmgrove Versus The Assistant Commissioner [CT]

M/s. Hotel Palmgrove Versus The Assistant Commissioner [CT] - TMI Issues:Assessment orders for 2010-11 and 2011-12 under TNVAT Act challenged by registered dealer supplying food and drinks. Discrepancies in purchases from canceled registration certificate holders M/s.Super Flames and M/s.Deepak Agencies. New Assessing Officer proposes reversing Input Tax Credit. Petitioner's explanations and evidence not considered adequately in impugned orders. Lack of verification and denial of opportunity for personal hearing. Previous Assessing Officer's satisfaction with petitioner's explanations not considered.Analysis:The petitioner, a registered dealer under TNVAT Act, challenged assessment orders for 2010-11 and 2011-12 due to discrepancies in purchases from M/s.Super Flames and M/s.Deepak Agencies, whose registration certificates were canceled. The new Assessing Officer proposed reversing Input Tax Credit, disregarding petitioner's explanations and evidence. The petitioner's reply reiterated that M/s.Super Flames had a new TIN number and was still a registered dealer. However, the respondent's impugned orders did not adequately address the petitioner's submissions and failed to verify the facts before passing judgment.The Court noted that the respondent did not reject the petitioner's explanations but overruled objections based on insufficient documentation. The respondent denied the petitioner an opportunity to submit further documents or have a personal hearing. The Court criticized the lack of verification by the respondent and highlighted the need for a more thorough assessment before passing orders. The Court also questioned why the previous Assessing Officer did not take further action after the petitioner's explanations in 2012, indicating satisfaction with the petitioner's stand.Consequently, the Court directed the matter to be sent back to the respondent for reconsideration. The petitioner was instructed to treat the impugned proceedings as a show cause notice, allowing 30 days to submit detailed objections supported by records. The respondent was ordered to provide a personal hearing, verify facts with the Commercial Tax Officer, and re-do the assessment in accordance with the law. The Court emphasized the importance of a fair and thorough assessment process, highlighting the need for proper verification and consideration of all relevant evidence.