2018 (8) TMI 940 - HC - VAT and Sales Tax

Court rules in favor of TNVAT Act registered dealer in assessment challenge, emphasizes VAT audit authority.

The court found in favor of the petitioner, a registered dealer under the TNVAT Act, in their challenge against the revision of assessments for specific ... Revision of assessment - TNVAT Act - VAT audit conducted in the business premises of the petitioner - Authorization by the Commissioner as required under the TNVAT Act - Held that:- This Court had an occasion to consider the validity of similar orders in the case of M/s.Empress Audio vs. Commissioner of Commercial Taxes and Others [2018 (6) TMI 1239 - MADRAS HIGH COURT], where it was held that the authorization was by the Commissioner, the competent Authority - the stand taken by the respondent in the impugned order that the VAT Audit conducted was well within the jurisdiction of the officer is a correct finding. The petitioner failed to produce any documentary evidence before the Assessing Officer. Though the petitioner did not produce documents before the inspecting officials, that will not be a bar for the petitioner to produce documents before the Assessing Officer. This Court is inclined to give one more opportunity to the petitioner to go before the Assessing Officer - petition allowed by way of remand. Issues:Challenging revision of assessments under TNVAT Act for assessment years 2014-15, 2015-16, and 2016-17.Analysis:The petitioner, a registered dealer under the TNVAT Act, challenged the revision of assessments for specific years. The petitioner's objection was primarily regarding the VAT audit conducted at their business premises without proper authorization by the Commissioner. The respondent confirmed the proposal after considering the petitioner's objection and the failure to produce documents before the Enforcement Wing or the Commissioner.The petitioner cited a previous court decision to support their argument, but the court highlighted another case where it was established that the Commissioner has the authority to order VAT audits for registered dealers. The court emphasized that the Commissioner's role is crucial in directing audit activities for effective departmental administration.The court found the respondent's decision regarding the jurisdiction of the officer conducting the VAT audit to be correct. Additionally, the court noted that the petitioner's failure to produce documents before the Assessing Officer did not justify the lack of documentary evidence. The petitioner admitted their mistake and requested another opportunity due to being a small dealer with minimal turnover.Considering the circumstances, the court granted the petitioner another chance to present their case before the Assessing Officer. The court directed the petitioner to treat the proceedings as show cause notices, submit objections with supporting documents within fifteen days, and attend a personal hearing. The respondent was instructed to reevaluate the assessment in compliance with the law, with no coercive actions against the petitioner during this process. The court concluded by closing the case without imposing any costs.