TaxTMI 
TaxTMI 
2026 (4) TMI 1352
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....e sale of old windmills. The said ITC claimed by the Revision Petitioner was reversed by the Assessing Officer on the ground that the inputs (spares for windmills) were used exclusively for generating electricity. Since electricity is a commodity exempted from tax, adjustment of ITC is not permissible. Therefore, the State Tax Officer levied tax of Rs. 51,90,117/- under Section 27(2) of the Act, along with an equal amount as penalty under Section 27(4)(ii). 2. The reversal of input tax credit was challenged by the Revision Petitioner in W.P.No.8505 of 2017. The writ petition was allowed with a direction to the Assessing Authority for fresh consideration and pass speaking order within a period of three months. The petitioner was given liberty to file an additional representation and participate in the personal hearing. 3. The Assessing Officer completed the assessment and passed fresh assessment order, reiterating the earlier assessment by recording, 'the dealer (Revision Petitioner) failed to respond in spite of repeated opportunities. The input tax credit claimed by the dealer has to be reversed since the output being electricity, which is exempted under Section 15, being a ....
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....lty of Rs. 51,90,117/- levied by the Assessing Authority under Section 27(4)(ii) of the TNVAT Act, 2006, and confirmed by the First Appellate Authority, calls for interference? 6. The Tribunal, after considering the materials, held that the assessment order is not barred by limitation. It is the continuation of the assessment order dated 27.02.2017 for the year 2011-2012. Subsequently, pursuant to the direction of the High Court in W.P.No.8505 of 2017 dated 24.03.2021, fresh assessment order passed on 16.08.2024. The Tribunal observed that the limitation commences on the actual date of assessment and not on the deemed date of assessments. The plea of the Revision Petitioner that the order is a non-speaking order was also rejected by the Tribunal. However, the matter was remitted back to the Assessing Officer for fresh consideration, on being satisfied that the assessment order reversing the ITC was passed on the ground not found in the show cause notice. Further, the Tribunal opined that the assessment had been completed without proper appreciation of the appellant's replies, without recording essential factual findings and without affording an effective opportunity of hearing. ....
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....ion of TNVAT Act and when two ITC adjustment available, were sold for Rs. 5,39,30,000/- and Rs. 21,57,200/- charged as VAT. The Department held that as per Section 2(1) of TNVAT Act, windmills are not capital goods and therefore, these are entitled for ITC for the production of electricity. 10. The operative portion of the proposal reads as below:- As per Section 2(11) of the TNVAT Act. It is clarified that the wind mills are not capital goods and therefore there are not entitled for Input Tax Credit for production of Electricity. You are owing Wind Mill and it is an asset to the company. The generation of power is exempt from tax. The Wind Mill is not a Raw material (or) consumable (or) packing material for generation of power. Hence the ITC on purchase of Wind Mill will remain with the owner. As the sale of power generated is exempted from tax, the tax due on any other transaction relating to you cannot be adjusted from the ITC. Hence, the ITC claimed and accrued on purchase of Wind Mill during 2010-11 & 2011-12 and still remain with the company could not be adjusted towards any other VAT due. Taking into consideration of the above facts, it....
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....sed by the dealer. The Assessing Officer assessed the tax and penalty as follows:- Taxable sales of wind mill upto 11.07.2011 Rs.53,93,00,000 @ 4% 2,15,72,000/- After 11.07.2011 Rs.48,65,00,000 @ 5% Rs. 2,43,25,000/- Total Taxable turnover Determined. Rs.1,02,58,00,000 Rs. 4,58,97,000/- Exemption on sales of Electricity Rs.258411321/- Total turnover redetermined Rs.1284211321/- Output tax due Rs.45897000/- Tax paid Rs.40706883/- Balance due to reversal of ITC Rs.5190117/- Notice in Form O is issued Penalty: Wrong availment of ITC of Rs. 5190117/- is ordered to have been reversed U/s 27(2) of TNVAT ACT 2006. Penalty of Rs. 5190117- being 100% of the wrong claim of ITC of Rs. 5190117/- is also levied U/s 27(4)(ii) of the Act. Penalty levied Rs.5190117/- Penalty paid 0 Balance Rs.5190117/- Notice in Form RR is issued. 13. This order was passed on 27.02.2017. The above two assessment orders dated 09.01.2017 for the Assessment Year 2010-2011 and order dated 27.02.2017 for the Assessment Year 2011-2012 were challenged in W.P.No.8505 of 2017 and was quashed by the High Court on 24.03.2....
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....im of input tax credit. Hence, I hereby hold to sustain the order passed by the learned assessing officer by reversal of input tax credit of Rs. 51, 90,117 u/s. 27 (2) of the act for the assessment year 2011-12. Thus, this portion of appeal is dismissed accordingly." 17. For the said reasoning, the penalty imposed also confirmed. 18. The Tribunal rightly recorded that the Appellate Authority had wrongly recorded that assessee failed to participate in the enquiry. The reply of the assessee though available on record not been discussed and considered. Hence, remitted the matter back for re-appreciation. 19. As pointed by the Learned Counsel appearing for the revision petitioner, re-appreciation of the facts in the light of the reply will be a futile exercise unless and until the show cause notice itself is withdrawn and fresh show cause notice is issued. Pointing out that the input tax credit claimed by the dealer against the VAT payable for the sale of old windmills. 20. The contentious issue in this case is whether the Input tax levied for the purchase of windmills and spares, to replace the old windmills, can be adjusted towards the VAT payable for the sale of old wind....