Assessment order quashed under VAT Act, remand for fresh consideration. Emphasis on genuine accounts.

The Court quashed the assessment order under the Tamil Nadu Value Added Tax, 2006 for the assessment year 2012-13, and remanded the matter to the respondent for fresh consideration. The Court emphasized the need for the respondent to verify the genuineness of the petitioner's accounts and consider them if found genuine. It was highlighted that there was no willful suppression of sales and purchases by the petitioner, and failure to disclose turnover does not justify reversal of input tax credit. The respondent's failure to address the petitioner's objections led to a violation of natural justice principles. The Court directed the respondent to provide a fair opportunity for the petitioner to raise objections and granted a right to a personal hearing, with final orders to be passed within eight weeks.

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Issues:
Challenging assessment order under Tamil Nadu Value Added Tax, 2006 for the assessment year 2012-13.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax, 2006, challenged the assessment order dated 23.09.2016 by the respondent. The petitioner, a works contractor for various Government Departments, claimed that his reply to the pre-revision notice was not considered in the assessment. He reported all sales and purchases, submitted trading, profit, and loss account, and argued against revision under Section 27 of the Act. The respondent, however, applied Rule 8(5) of the Tamil Nadu Value Added Tax Rules, 2007, without scrutinizing the petitioner's accounts, leading to the petition.

The petitioner contended that despite submitting the trading, profit, and loss account, the respondent did not discuss it in the assessment order. The Court emphasized that the respondent must verify the genuineness of such accounts and accept them if found genuine. The assessment order blindly followed the formula under the Rules, without considering the petitioner's submissions, violating principles of natural justice.

The Court noted that there was no willful suppression of sales and purchases by the petitioner for the assessment year 2012-13. Referring to a previous judgment, the Court held that failure to disclose turnover does not warrant reversal of input tax credit for purchasing dealers. The respondent failed to consider objections raised by the petitioner, leading to a violation of natural justice principles.

Consequently, the Court quashed the assessment order and remanded the matter to the respondent for fresh consideration, directing a fair opportunity for the petitioner to raise objections and granting a right to a personal hearing. The respondent was instructed to pass final orders within eight weeks from the date of the Court's order.

In conclusion, the writ petition was disposed of without costs, and the connected miscellaneous petition was closed.

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