2018 (10) TMI 885 - HC - VAT and Sales Tax

High Court Upholds VAT Assessment Order, Emphasizes Appeal Remedy for Petitioner

Infolink Solutions Pvt. Ltd., Versus The State of Maharashtra & Others

The High Court dismissed the writ petition challenging the order under Section 23 of the MVAT Act for VAT assessment for the Financial Year 2011-12. The ... Maintainability of petition - remedy of appeal - Input tax credit - Principles of Natural Justice - It is submitted that the Respondent No.3 has not properly appreciated the Petitioner's contention that mere absence of proof of despatch to evidence the receipt of the so called purchased goods, cannot lead to the denial of inputs tax credit - Held that:- The impugned order, on appreciation of the evidence before him, with regard to the actual receipt of purchased goods in the absence of the despatch proof and/or any other evidence to support the receipt came to the conclusion that the purchases are not genuine. A letter dated 28th December, 2016 of the Petitioner does not address the query of the Assessing Officer as it only states that goods are received by hand delivery but no evidence of the same is provided. There is no reason to exercise our writ jurisdiction as an efficacious alternate remedy of filing an appeal to Deputy Commissioner (Appeals), is available under the MVAT Act - petition dismissed being not maintainable. Issues: Challenge to order under Section 23 of the MVAT Act for assessment of VAT for the Financial Year 2011-12 based on natural justice principles and evidence of receipt of purchased goods.Analysis:1. The petitioner challenged an order dated 11th October, 2017, passed under Section 23 of the Maharashtra Value Added Tax, 2002 (MVAT Act), by the Sales Tax Officer Respondent No.3, regarding the assessment for the Financial Year 2011-12 in respect of VAT under the MVAT Act. The petitioner contended that the order was passed in breach of natural justice principles. The main argument was that the absence of proof of despatch to evidence the receipt of purchased goods should not lead to the denial of input tax credit. The petitioner claimed that the goods, a software package, were received by hand delivery, and therefore, the lack of a lorry receipt should not be a determining factor.2. The impugned order considered the communication from the Assessee stating that despatch proof was only required for interstate sales and not for intrastate sales. The petitioner argued that the absence of despatch proof should not automatically lead to the conclusion that the goods were not received. However, the Sales Tax Officer, after considering the evidence before him, including a letter from the petitioner dated 28th December, 2016, concluded that the purchases were not genuine due to the lack of evidence supporting the receipt of goods. The petitioner's letter only mentioned that goods were received by hand delivery but did not provide any evidence to substantiate this claim.3. The High Court noted that the issues raised by the petitioner would require factual determination by an Appellate Authority in an appeal, based on the evidence available on record. Therefore, the court found no reason to exercise its writ jurisdiction, as the petitioner had an alternate remedy available by filing an appeal to the Deputy Commissioner (Appeals) under the MVAT Act. The court dismissed the writ petition but clarified that if the petitioner filed an appeal along with an application for condonation of delay, the time spent in prosecuting the petition would be excluded for calculating the time within which an appeal must be filed before the Appellate Authority, citing a decision of the Apex Court in a related case.4. In conclusion, the High Court dismissed the writ petition, emphasizing the availability of an appeal process for the petitioner to challenge the impugned order. The court provided guidance on the exclusion of time spent on the petition for filing an appeal and highlighted the importance of following the proper legal procedures in such matters.