2019 (3) TMI 846 - HC - VAT and Sales Tax

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 ... Revision of assessment - Section 27 of TNVAT Act - all facts not properly considered - principles of natural justice - Held that:- In the instant case, the petitioner being a purchasing dealer, has reported all the sales and purchases effected during the assessment year 2012-13 to the respondent and there is no suppression of sales and purchases done by him - All these factors were not considered in the impugned assessment order, even though, the same was raised as objection by the petitioner in his detailed reply dated 28.06.2016 sent to the respondent. Therefore, in the considered view of this Court, the respondent has violated the principles of natural justice by not considering the objection raised by the petitioner on merits and in accordance with law. The matter is remanded back to the respondent for fresh consideration in accordance with law - petition allowed by way of remand. 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.