2015 (3) TMI 1265

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....er. Had this been taken in the show-cause notice, the petitioner would have given his objection. Thus, it violates the principles of natural justice. ii) The authority has failed to take into consideration that the purchaser cannot be penalised even for the non-payment of tax by the seller. 3. According to the petitioner, all it requires is that the purchaser has to produce the way-bill and that has been done as per Rule 10 of TNVAT Act. Subsequently, he has also produced annexure 2, which is the payment of seller and that the liability of the petitioner is already over. That fact is not at all considered in the final order. It is against the principles laid down in the the decisions of this Hon'ble Court reported in 50 VST 179, 60 VST 283, hence it is palpably a wrong order. 4. The learned counsel appearing for the petitioner would also contend that the authority failed to take into consideration that the petitioner/purchaser as well as the seller has got officially authorized godowns in the Tuticorin Port yard itself and the purchase and sale culminated in the Tuticorin Port yard itself and hence, there is no question of production of way bill or Transfer bill. Witho....

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....n the show-cause notice cannot be a ground for passing a final order. The authorities have failed to do so. 9. Secondly, as per the decisions of this Court reported in [2012 50 VST 179 (Mad), (Althaf Shoes (P) Limited Vs The Assistant Commissioner (CT), Valluvarkottam, Assessment Circle , Chennai-6) and [2013] 60 VST 283 (Mad), ( Sri Vinayaga Agencies Vs The Assistant Commissioner (CT), Vadapalani-I, Assessment Circle , Chennai and another), one thing is clear that it is for the purchaser to produce the way-bill. In this case, after the show-cause notice, the petitioner also produced annexure-2 and thereafter, tax has been paid by the selling agent. When that has been produced as early as on 22.01.2015 along with reply, no proper explanation has been given in the order and further opportunity has not been given. 10.In this context, it is relevant to extract the following portions in [2012 50 VST 179 (Mad), (Althaf Shoes (P) Limited Vs The Assistant Commissioner (CT), Valluvarkottam, Assessment Circle , Chennai-6 ) . "Going by the above said rule and read along with Section 19(1) of the Tamil Nadu Value Added Tax Act, it is clear that so long as the purchasing dealer has co....

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....ered dealer establishes that the tax due on such purchase has been paid by him in the manner prescribed. The pre-revision notices and the orders clearly stated in paragraph 3 that the petitioner herein had paid the tax to the selling dealer. If that be the case, the petitioner's case squarely falls under the proviso to Section 19(1) of the TNVAT Act. That is availed of only by following rule 10(2). It is also not in dispute that the self-assessment has been made under Section 22(2) of the TNVAT Act and therefore the petitioner was justified in claiming the input-tax credit. It is another matter that the selling dealer has not paid the collected tax and that liability has to be fastened on the selling dealer. It cannot be mulcted on the petitioner purchasing dealer, which had shown proof of payment of tax on purchases made. Sub-section (16) of Section 19 states that the input-tax credit availed of is provisional. It, however, does not empower the authority to revoke the input-tax credit availed of on a plea that the selling dealer has not paid the tax. It only relates to incorrect, incomplete or improper claim of input-tax credit by the dealer. It is not so in these cases.....

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....ing by rule 10(2) of the TNVAT rules read along with Section 19(1) of the Tamil Nadu Value Added Tax Act, it is clear that so long as the purchasing dealer has complied with the requirements as given under rule 10(2), the claim of purchasing dealer cannot by any length of reasoning, be denied by the Revenue. The mere fact that the Revenue had not made an assessment on the assessee's vendor, per se, cannot stand in the way of the assessing officer considering the claim of the assessee under Section 19 of the Tamil Nadu Value Added Tax Act. A reading of the circular issued by Commissioner along with the provisions of the Act makes it clear that there is nothing repugnant in the said circular issued by the Commissioner as a head of the Department as regards the provisions of the Act on input-tax credit claim. Holding so, allowed the writ petition. 23. In the case of Sri Vinayaka Agencies, cited supra, the petitioner was dealer in lubricants, purchasing lubricants from a registered dealer. On inspection, it was found that the vendor/dealer had not filed monthly returns nor paid tax to the Department. Though the petitioner had paid tax to the selling dealer, revision notice was i....