Deemed assessment does not bar reassessment, but input tax credit orders must stay within the show cause notice and statute.

Deemed assessment under the Tamil Nadu VAT Act did not bar reassessment within the statutory limitation period, and the dealer could not refuse to produce records merely because the return had become a deemed assessment. The court also held that orders on input tax credit must remain within the scope of the show cause notice and address the governing statutory framework; where that was not adequately done, the orders were set aside and remitted for fresh adjudication after notice and hearing. Mixed relief followed, with some matters rendered infructuous and the remaining orders sent back for reconsideration on merits.

---

---

Issues: (i) Whether the amended deeming provision under the Tamil Nadu Value Added Tax Act, 2006 limited the assessing authority's power to reopen completed or deemed assessments and whether the dealer could avoid producing records on the plea of expiry of record-retention period; (ii) Whether the impugned orders, to the extent they travelled beyond the proposal in the show cause notice and omitted consideration of the statutory framework governing input tax credit, were sustainable or required to be quashed and remitted.

Issue (i): Whether the amended deeming provision under the Tamil Nadu Value Added Tax Act, 2006 limited the assessing authority's power to reopen completed or deemed assessments and whether the dealer could avoid producing records on the plea of expiry of record-retention period.

Analysis: The amended Section 22 introduced deemed assessment for returns remaining unassessed, but that finality did not extinguish the separate statutory power of reassessment under Section 27. The record-retention obligation under Section 64 was read in the context of the reassessment window and not as a means to defeat lawful scrutiny. Since the notices and inspection occurred within the period available for reopening, the plea that no documents could be called for only because the assessments had become deemed assessments was rejected.

Conclusion: The assessing authority retained power to reopen and call for supporting records within the statutory period, and the plea based on non-retention of records failed.

Issue (ii): Whether the impugned orders, to the extent they travelled beyond the proposal in the show cause notice and omitted consideration of the statutory framework governing input tax credit, were sustainable or required to be quashed and remitted.

Analysis: An adjudication cannot rest on grounds that are not properly addressed in the notice or that enlarge the dispute without dealing with the statutory safeguards governing denial of input tax credit. At the same time, the dispute was not treated as wholly outside jurisdiction, because the authority was entitled to examine the assessee's entitlement to credit on the basis of records and the relevant statutory provisions. As the impugned orders did not adequately consider the effect of the amendments and the credit-related provisions, the proper course was to set them aside and remit the matters for fresh consideration after giving the assessee an opportunity to file objections and produce documents.

Conclusion: The impugned orders were quashed and the matters were remitted for fresh adjudication after opportunity to the assessee.

Final Conclusion: The petitions were disposed of with mixed relief: some became infructuous, while the remaining assessment orders were set aside and sent back for reconsideration on the merits after notice and hearing.

Ratio Decidendi: Deemed assessment does not bar statutory reassessment within limitation, but an order affecting input tax credit must conform to the show cause framework and address the relevant statutory provisions before being sustained.

---