TaxTMI 
TaxTMI 
2020 (9) TMI 298
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....f the Court. 3. The factual matrix of the case is that the plaintiff is a private limited company incorporated under the Companies Act. The plaintiff is a manufacturer of Air Filters of different grades and supply the same all over India and outside India also. The plaintiff had purchased their input materials from the defendant from time to time and has paid the total consideration including the VAT. It is contended that on the strength of the payments, the plaintiff has taken credit of VAT in their books of accounts as per the VAT procedure and Act and have filed their returns with the Department of Commercial Taxes. On filing their returns quoting the purchase and tax having been paid with the defendant, the plaintiff was surprised to r....
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....t the VAT credit having been denied and a proposition order having been passed, the plaintiff demanded the recovery of the aforesaid amount from the defendant. When the defendant failed to make good the loss caused to the plaintiff, without any other alternative has filed the suit for recovery of money. On filing the suit, the Trial Court was pleased to issue notice to the defendant and the defendant, after receipt of the suit summons did not choose to appear before the Court and was placed ex-parte. 5. The Trial Court has recorded the evidence of the Senior Executive Officer of the plaintiff as P.W.1 and got marked the documents Ex.P1 to P9. 6. The plaintiff contended that the Trial Court after considering the material available on recor....
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....dant has collected tax from the assessee company and failed to make payment of tax to the Department within the next calendar month. The selling dealers have retained the VAT collected by them legitimately payable to the Department. Ex.P1 dated 20.12.2014 is clear that proposition notice under Section 39(1) of the Act was issued and served on the dealer company providing seven days to file objections, if any, for the restriction of ITC claim during the assessment periods. It is further observed that the dealer company has not filed any reply till date and confirmed the proposals made in the proposition notice dated 04.12.2014 since, the dealer has not replied to the notice. The Trial Judge failed to consider Exs.P1, P2 and P3 and has errone....
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....e same, the point that arises for consideration before this Court is: "(1) Whether the Trial Court has committed an error in dismissing the suit in coming to the conclusion that there is no cause of action for the plaintiff to sue the defendant ? (2) What Order? 12. Point No.1: Having heard the learned counsel for the appellant, considering the material available on record and also on perusal of the plaint, it is clear that the plaintiff has sought for recovery of VAT paid to the defendant by the plaintiff while purchasing the materials from the defendant. The plaintiff mainly relies upon Exs.P1 to P4 to recover the said amount from the defendant. 13. On perusal of Ex.P1, no doubt, an order has been passed under Section 39(1) of the ....
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....iff since the selling dealer has not paid the tax, which has been collected. There is no dispute with regard to the order and also the demand. 15. It is the case of the plaintiff that the plaintiff has paid the tax at the time of purchase from the defendant and the defendant in turn did not pay the tax. No doubt, the documents Exs.P7 and P8 disclose that a notice was issued against the defendant and so also one more letter was addressed i.e., Ex.P6 against the defendant with regard to the proposition notice for non-payment of VAT. The defendant also did not respond to the letter and legal notice - Exs.P6 and P7 and also did not contest the suit before the Trial Court. 16. Having perused the material available on record i.e., the plaint av....
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.... and further observed that the details of input tax availed by the assessee-Company is incorrect and when such an observation has been made and when the assessee-Company has not placed any semblance of material before this Court for having again paid the tax which has not been paid by the defendant, no cause of action arises for the plaintiff to recover the same from the defendant. 17. No doubt, the learned counsel has brought to my notice Sections 38 and 39 of the Act and Section 38 of the said Act is in respect of assessment of tax and no dispute with regard to assessment of tax and also passing of an order under Section 39 of the Act. 18. This Court has already observed that in terms of Exs.P2 and P4, there was a demand and having paid....