High Court sets aside TNVAT Act assessment orders for non-compliance with directives on tax levy and Input Tax Credit reversal.

The High Court set aside assessment orders under the TNVAT Act for 2013-2014 and 2014-2015 due to non-compliance with appellate authority directives on tax levy and Input Tax Credit reversal. The court emphasized meticulous adherence to directives, ruling the impugned orders legally unsustainable. Fresh consideration was ordered, stressing compliance with directives, providing a chance for a personal hearing, and conducting assessments lawfully. Strict compliance with appellate directives in tax assessments was underscored to avoid legal unsustainability and ensure proper procedure adherence.

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Issues:
Challenge to assessment orders under TNVAT Act for 2013-2014 and 2014-2015 - Levy of tax on purchase suppression and reversal of Input Tax Credit.

Analysis:

1. Levy of Tax on Purchase Suppression:
The petitioner, a registered dealer under TNVAT Act, challenged assessment orders for 2013-2014 and 2014-2015, focusing on tax levy on purchase suppression. The appellate authority had remanded the matter, directing the assessing officer to furnish purchase details, investigate Form C issuance, check the petitioner's bank account, and verify payments to suppliers. However, the assessing officer ignored these directives and completed the assessment summarily. The High Court held that the officer must comply with the appellate authority's directions meticulously. As the directions were disregarded, the impugned orders were deemed legally unsustainable. Therefore, the court set aside the orders and remanded the matter for fresh consideration, emphasizing strict adherence to the appellate authority's instructions.

2. Reversal of Input Tax Credit:
The second issue pertained to the reversal of Input Tax Credit. The appellate authority had directed the petitioner to provide tax invoices and evidence of payments to suppliers, while the assessing officer was instructed to verify supplier registration status at the time of invoicing. However, the assessing officer failed to follow these directions, leading to a flawed assessment process. The High Court emphasized the importance of complying with the appellate authority's directives and ruled that the impugned orders were unsustainable in law. Consequently, the court allowed the writ petitions, set aside the orders, and remanded the matter to the respondent for a fresh assessment. The respondent was instructed to meticulously adhere to the appellate authority's directions, provide a chance for a personal hearing, and conduct the assessment in accordance with the law.

In conclusion, the High Court's judgment highlighted the significance of strict compliance with directives issued by appellate authorities in tax assessment matters under the TNVAT Act. Failure to adhere to such directives can render assessment orders legally unsustainable, necessitating a fresh consideration of the matter in line with the prescribed procedures and instructions.

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