2019 (7) TMI 244 - HC - VAT and Sales Tax

Court sets aside order in TNVAT Act case due to failure to follow JKM graphics principle. Fresh assessment mandated.

The court set aside the impugned order in a case challenging a revised assessment under the TNVAT Act, noting the respondent's failure to adhere to the ... Validity of assessment order - it is a case of writ petitioner that he was filing monthly returns and there was deemed assessment under Section 22(2) of TNVAT Act - failure to report purchase - HELD THAT:- This leads this Court to the inevitable sequitur that JKM principle now governing the field and the procedure of making assessment with regard to a dealer by relying on Annexure-II being sale particulars of dealer's sellers without adhering to requisite norms is incorrect besides being unsafe. The writ petitioner is entitled to have the impugned order set aside on the ground that it is not inconformity with the order passed in the earlier round of litigation as besides being in violation of M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [2017 (3) TMI 536 - MADRAS HIGH COURT]. Petition disposed off. Issues:1. Challenge to revised assessment under TNVAT Act.2. Allegation of not following JKM graphics principle in the impugned order.Analysis:1. The writ petition challenged a revised assessment made by the respondent under Section 27(1)(a) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act). The petitioner, a hardware dealer registered under the TNVAT Act, contended that the assessment was based on purchases not reported in monthly returns, leading to a deemed assessment under Section 22(2) of the TNVAT Act. A show cause notice was issued, followed by an order adopting the best judgment method under Section 22(4) of the TNVAT Act. The petitioner had previously challenged a similar order in a writ petition, which resulted in directions for the petitioner to file a petition under Section 84 of the TNVAT Act for rectification.2. The petitioner argued that the impugned order did not adhere to the JKM graphics principle, as established in a previous case. The court noted that the respondent's reliance on Annexure-II of the petitioner's sellers without following the JKM principle was incorrect. The court emphasized the importance of following the JKM principle in making assessments to avoid discrepancies and multiplicity of proceedings. Consequently, the court set aside the impugned order and directed the respondent to make a fresh assessment after submitting a new methodology/module for assessment before a single judge. The court specified timelines for the fresh assessment and communication to the petitioner, while also allowing the petitioner to file a contempt petition if needed.This detailed analysis of the judgment highlights the issues involved, the arguments presented by the parties, and the court's reasoning leading to the final decision.