Court upholds pre-revision notice challenge dismissal under TNVAT Act, 2006 for unlawful tax collection

The court dismissed the challenge to the pre-revision notice under the TNVAT Act, 2006 for the assessment year 2012-13. While acknowledging the unlawful collection of advance tax by Enforcement Wing Officials, the court found the notice itself valid. It emphasized that premature challenges to show cause notices are not maintainable unless issued without authority. The court directed the respondent to allow the petitioner to file objections, grant a personal hearing, and consider relevant legal precedent. The respondent was instructed to pass final orders within eight weeks, ensuring a fair process without costs awarded to either party.

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Issues:
Challenge to pre revision notice under TNVAT Act, 2006 for assessment year 2012-13.

Analysis:
The petitioner, a registered dealer under TNVAT Act, 2006, challenged a pre revision notice issued by the respondent for alleged sales suppression. The petitioner claimed that a sum of Rs. 50,000 was illegally calculated as advance tax during an inspection. The petitioner sought to quash the notice and refund the advance tax amount. The respondent proposed revising the assessment for the year, demanding Rs. 4,12,275 as tax for sales suppression.

The petitioner argued that the collection of Rs. 50,000 by Enforcement Wing Officials was unlawful, citing a Division Bench judgment that officials cannot collect tax during audits. The respondent contended that the notice was a show cause notice and premature challenge was not maintainable. The respondent assured to consider objections and pass final orders in accordance with the law.

The court noted that while the Enforcement Wing collected advance tax before issuing the notice, it did not invalidate the notice itself. The court emphasized that a show cause notice cannot be challenged under Article 226 unless issued without authority or jurisdiction. The court found no grounds to quash the notice but directed the respondent to allow the petitioner to file objections, grant a personal hearing, and consider the Division Bench judgment.

Ultimately, the court disposed of the writ petition, instructing the respondent to permit the petitioner to file objections and pass final orders within eight weeks, considering the legal precedent. The court highlighted the importance of allowing the petitioner to raise objections and ensuring a fair process, without awarding costs to either party.

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