Court grants writ petitions, allows input tax credit, sets aside penalty, directs re-issuance of notice.

The court allowed the writ petitions, set aside the impugned orders denying input tax credit and demanding penalty, and directed the respondent to re-issue a notice dated 13.09.2013. The petitioner was granted time to produce records and objections, with an opportunity for a personal hearing, in accordance with the law. No costs were awarded, and connected Miscellaneous Petitions were closed.

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Issues:
Challenge to impugned notices denying input tax credit and demanding penalty without proper show cause notice.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, challenged notices dated 28.06.2013 from the respondent denying input tax credit for assessment years 2008-2009 to 2013-2014. The petitioner argued that no show cause notice was issued before proposing to reverse the input tax credit and demanding a 50% penalty.

The petitioner relied on a previous court decision to support their claim that as long as the purchasing dealer complies with Rule 10(2) requirements, the claim for input tax credit cannot be denied by the Department.

The Government Advocate presented written instructions showing that a notice was issued to the petitioner to produce original bills and proof of tax payment. However, the petitioner claimed not to have received such notice.

Further examination revealed that a modified notice dated 13.09.2013 was issued to the petitioner, requesting production of original invoices and proof of payment to enable further action against the seller. The petitioner was given 15 days to comply, but did not act on this notice after a stay order was granted on 16.08.2013. The Court noted that since the respondent corrected the mistake and issued a modified notice, the impugned notices could not be enforced.

Consequently, the writ petitions were allowed, impugned orders set aside, and the respondent was directed to re-issue the notice dated 13.09.2013, allowing the petitioner adequate time to produce records and objections for consideration in accordance with the law, with an opportunity for a personal hearing. No costs were awarded, and connected Miscellaneous Petitions were closed.

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