Petitioner's Input Tax Credit claim under TNVAT 2006 assessment order quashed for non-compliance with Section 140 procedures

The Madras HC quashed an assessment order for AY 2017-18 where the petitioner claimed Input Tax Credit under TNVAT 2006 without following Section 140 procedures of TNGST Act 2017. The court remitted the case back to the first respondent for fresh consideration within six months, requiring the petitioner to deposit 25% of the disputed amount as pre-deposit. The quashed order was treated as corrigendum to the preceding notice. Petition disposed.

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The Madras High Court, through Justice C. Saravanan, disposed of the Writ Petition concerning the impugned Assessment Order dated 29.10.2024 for Assessment Year 2017-18 under TNVAT, 2006. The petitioner, a Sales Tax assessee, had un-utilised Input Tax Credit without filing the TRAN-1 application and failed to comply with Section 140 of the TNGST Act, 2017, also not responding to the Show Cause Notice.The Court noted its consistent precedent to "rescue" similarly situated persons by quashing such impugned orders subject to payment of 25% of the disputed tax as a pre-deposit. Accordingly, the impugned order was quashed and remitted for fresh adjudication de novo within six months, conditional on the petitioner depositing 25% of the disputed amount in cash.The impugned order is to be treated as a corrigendum to the preceding notice. The petitioner must file a reply to the Show Cause Notice within 30 days of receipt of the order copy, along with the pre-deposit. The first respondent must then pass fresh orders on merits, ensuring the petitioner is heard, preferably within three months.Failure to comply will result in automatic dismissal of the petition, allowing the first respondent to proceed as per law. The petition was disposed of with no costs, and connected miscellaneous petitions were closed.

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