Court sets aside assessment orders under TNVAT Act for petitioner's challenge on Input Tax Credit claims

The court set aside the assessment orders for the petitioner's challenge under the TNVAT Act for the assessment years 2014-15 and 2015-16. The matter was remanded back to the respondent for fresh consideration, emphasizing the need for thorough verification and due diligence in assessing Input Tax Credit claims. The respondent was instructed to conduct a detailed examination, provide a personal hearing to the petitioner, verify details of other dealers within the same circle, and issue new orders in compliance with the law. No costs were awarded, and the related WMP was closed.

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Issues:
Challenge of assessment orders under TNVAT Act for assessment years 2014-15 and 2015-16 based on Input Tax Credit (ITC) claims.

Analysis:
The petitioner, a registered dealer under TNVAT Act, contested assessment orders for 2014-15 and 2015-16 due to alleged mis-match in ITC claims on local purchases from registered dealers. The respondent issued notices highlighting the discrepancies and requested original purchase invoices and evidence for assessment purposes.

The petitioner failed to provide satisfactory proof, leading to the proposed disallowance of ITC adjustment and penalty imposition under Section 27 (4) (ii) of the TNVAT Act. Despite appearing before the respondent and sharing transaction details, the petitioner did not submit written objections, resulting in the assessment orders being passed without considering their submissions.

Upon receiving the orders, the petitioner submitted a representation emphasizing their compliance with filing returns, claiming ITC, and providing purchase bills. They pointed out that most sellers were within the same assessment circle, leading to discrepancies in Annexure-II details. The petitioner requested a review of the tax and penalty imposed based on the submitted purchase invoices.

The respondent's failure to verify the authenticity of submitted invoices and lack of effort in cross-checking sellers within the same assessment circle were highlighted. The court referenced a previous case's guidelines for conducting thorough inquiries in such situations, emphasizing the need for proper verification and due diligence by the Assessing Officer.

Consequently, the court set aside the impugned orders, remanding the matters back to the respondent for fresh consideration. The respondent was instructed to conduct a detailed examination, provide a personal hearing to the petitioner, verify details of other end dealers within the same circle, and pass new orders in accordance with the law. The judgment concluded with no costs awarded and the connected WMP closed.

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