Limitation in VAT reassessment and failure to reconcile sales-return evidence led to remand for fresh assessment.

Under the Tamil Nadu VAT regime, the limitation objection failed because reassessment proceedings were initiated within time; the interpretation of "determination" in Section 27 and the deemed assessment scheme under Section 22(2) meant timely commencement of proceedings was sufficient. On the sales-return issue, the assessment could not stand because the officer did not properly reconcile the invoices, credit notes and other materials with Rule 10(6)(b)(i)(B) requirements, and proceeded on an assumption of non-production. The merits challenge succeeded, the assessment was set aside, and the matter was remitted for de novo consideration of the disputed sales-return claim.

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Issues: (i) Whether the reassessment notices were barred by limitation in view of the deemed assessment scheme under the Tamil Nadu Value Added Tax Act, 2006. (ii) Whether the assessment orders could be sustained without proper reconciliation of the documents produced to substantiate sales returns under Rule 10(6)(b)(i)(B) of the Tamil Nadu Value Added Tax Rules, 2007.

Issue (i): Whether the reassessment notices were barred by limitation in view of the deemed assessment scheme under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The limitation plea turned on the meaning of "determination" in Section 27 and the effect of Section 22(2) deeming assessments for the relevant years. The notices initiating revision proceedings were issued before expiry of the limitation period. Since commencement of proceedings within time is sufficient, the challenge based on limitation could not succeed.

Conclusion: The limitation objection was rejected and is against the assessee.

Issue (ii): Whether the assessment orders could be sustained without proper reconciliation of the documents produced to substantiate sales returns under Rule 10(6)(b)(i)(B) of the Tamil Nadu Value Added Tax Rules, 2007.

Analysis: The assessee had furnished statements, invoices, credit notes and other supporting material, but the assessing officer did not tabulate the materials produced or compare them with the requirements of the Rule. The rejection of the claim proceeded on an assumption of non-production rather than a reasoned verification of the evidence. The required reconciliation exercise was therefore not carried out in the manner mandated by law.

Conclusion: The assessment orders were unsustainable and were set aside for fresh consideration.

Final Conclusion: The writ petitions succeeded only to the extent of the merits challenge, and the matter was remitted for de novo assessment on the disputed sales return claim.

Ratio Decidendi: For limitation under a taxing statute using the expression "determination", proceedings are treated as commenced when the assessment process is initiated within time; and an assessment rejecting a claim must be supported by a proper comparison of the materials furnished with the statutory requirements before arriving at a conclusion.

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