Court quashes assessment additions, stresses assessee's right to respond to discrepancies.

The court set aside the additions in the assessment order due to the absence of a mechanism for the assessee to respond to data discrepancies. Emphasizing the need for the Department to provide all relevant materials to the assessee before passing an assessment order, the court directed the completion of assessment without delay. Additionally, the court instructed the petitioner to appear before the Assessing Officer with supporting material for a de novo assessment within six weeks. Failure to comply would revive the initial assessment order. The court's decision underscores the importance of upholding natural justice principles in the assessment process.

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Issues:
1. Challenge to an order of assessment under the Tamil Nadu Value Added Tax Act, 2006 for the period 2015-16 regarding reversal of Input Tax Credit (ITC) and sales suppression.
2. Reversal of ITC on purchases from dealers whose registrations are stated to be cancelled.

Analysis:
1. The first issue pertains to the challenge against an assessment order dated 25.10.2019 under the Tamil Nadu Value Added Tax Act, 2006 for the period 2015-16. The assessment is based on the reversal of Input Tax Credit (ITC) and sales suppression, identified through internal web reports of the Commercial Taxes Department and cross verification of the petitioner's returns with third party dealers' annexures. The court had previously directed the establishment of an intra-departmental mechanism to address mismatches and provide the assessee with an opportunity to respond to such data. Despite this directive and a subsequent Circular issued by the Commissioner of Commercial Taxes Department, no progress was made. The court held that the completion of assessment should not be delayed due to the absence of the mechanism. It emphasized the need for the Department to provide all relevant materials to the assessee for a response before passing a speaking order of assessment. Consequently, the additions in the impugned order were set aside, and the order itself was inclined to be set aside due to the lack of pre-assessment notices served upon the petitioner.

2. Regarding the second issue of reversing ITC on purchases from dealers with cancelled registrations, the court directed the petitioner to appear before the Assessing Officer with supporting material on a specified date. The Assessing Officer was instructed to conduct a de novo assessment within six weeks after hearing the petitioner, either through video conference or physical hearing. Failure to comply with the hearing date would result in the revival of the impugned order dated 25.10.2019. The court disposed of the Writ Petition in the mentioned terms without imposing any costs.

This judgment highlights the importance of providing the assessee with an opportunity to respond to assessment-related data, ensuring the principles of natural justice are upheld throughout the process.

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