Source: http://sircoficai.org/TN-VAT.aspx
Timestamp: 2019-04-25 06:13:08+00:00

Document:
Natural Justice: When the petitioner has specifically sought for an opportunity of personal hearing and when the respondent proposes to revise the turnover under Section 22(4) of the State Enactment, an opportunity of personal hearing ought to have been provided to the petitioner. This Court does not approve the manner, in which, the impugned assessment has been completed. Considering the fact that certain reasons have been assigned in the impugned order stating that the dealer did not substantiate their plea by filing documentary evidence, this Court is of the view that impugned assessment proceedings should be treated as a show cause notice, so that the petitioner can file a comprehensive reply covering all the points and produce necessary documents before the Assessing Officer for redoing the assessment.  (Mad)WP No.1849 of 2018 Dated : 30.1.2018. M/s.Otto Clothing Private Ltd., Vs AC (CT), Nandanam Assessment Circle.
TDS and Penalty: For any illegal collection of tax, without an opportunity of being heard penalty cannot be imposed. In the revision notice, there was no proposal to levy penalty u/s 40(2) of the TNVAT Act. What is required to be seen is whether Section 40(2) of the TNVAT Act would stand attracted. Admittedly, the petitioner not deducted tax at source and therefore, the petitioner cannot be brought within the ambit of Section 40(1) of the TNVAT Act. If that be so, the question of invoking Section 40(2) of the TNVAT Act does not arise. However, in the instant case the contractee has deducted tax at source on the premise that the works contracts are taxable. However, when the assessment proceedings were made, the petitioner was able to convince that the Assessing Officer by records that the transaction done by the petitioner is entitled for exemption which plea was accepted and assessment was completed.
Input tax credit : The dealer was found to have effected purchases from several dealers and availed of input-tax credit (ITC) on such purchases, but the sellers had not disclosed the relevant turnover in their monthly returns or paid tax due and payable to the Department. The notice issued by the assessing officer proposed to reverse the ITC availed of by the dealer. In a writ petition filed in this regard, the division bench, affirming the earlier decision of the single judge, held that the show-cause notice issued by the AO proposing to reverse the ITC availed of by the dealer lacking valid or sustainable basis. If the sales effected to the dealer were not disclosed by such a seller either in the form of return filed monthly or the tax collected from the dealer was not made over to the Department by such seller, action would lie against such defaulting seller and not against the purchaser. Instead of trying to cross verify the ITC availed of by the dealer with specific reference to each component, action was directed by the AO against the dealer.  99 VST 341 (Mad) AC (CT), THIRUVERKADU ASSESSMENT CIRCLE, KOLATHUR V. INFINITI WHOLESALE LTD.
Compounding Notice: Writ petition was moved against a notice of compounding asking the dealer to pay tax and compounding fee amounting to twice the amount of tax. The dealer contended that it rendered service to the original owner of the detained consignment of mobile phones, that for the purposes of reworking the mobile phones, the consignment of 435 boxes (containing 4350 mobiles) was transferred from its own facility in Chennai, that the reworked consignment being despatched to Delhi was accompanied by documents, which, inadvertently, instead of referring to its own address, adverted to the address of another entity in New Delhi, that the conclusion that it was a case of inter State sale was erroneous. Considering this, the Court held that the dealer's claim that the mobile phones had been received at its Chennai unit from its unit in Manaser for the purpose of repair had not been dealt with by the CTO, while issuing the notice. Furthermore, notice was passed at a point in time when the CTO had not completed the exercise of tallying the IMEI numbers and directed the CTO to rule on the representation preferred before him by the dealer, hear the authorised representative, and thereafter, pass a speaking order and supply it to the dealer.  101 VST 279 (Mad) EXCELLENCE MOBILE TECH INDIA P LIMITED v. CHECKPOST OFFICER / CTO, PUZHAL (OUT) CHECKPOST, CHENNAI.
Purchase tax, Exim Scrip: On the question whether the State Bank of India would be liable to levy of purchase tax for accepting EXIM scrips for the purpose of cancellation from holders thereof, it was held that "ownership" in the goods was never transferred or assigned to the State Bank of India and not taxable  97 VST 1 (SC) CTO AND OTHERS v. SBI.
Remand directions: The Appellate Deputy Commissioner (ADC), in appeals filed by the dealer against orders of assessment passed by the AC rejected all the pleas raised by the dealer, set aside the assessment, and remanded the matter for fresh investigation giving opportunity to the dealer to produce all the documents. In a writ petition filed, the court held that the ADC had recorded certain findings against the dealer, yet, remanded the matter for thorough verification. Both these conclusions could not sail together. When the ADC came to the conclusion that the matter required to be re-examined, he should have refrained from making any adverse observations on the merits of the assessment. The ADC having rejected all the grounds raised by the dealer in the appeals and remanded the matter to the AC, obviously, the AC, who was, a subordinate officer to the ADC, would be guided by those findings rendered by the superior authority. Therefore, the findings recorded by the ADC were vacated, and the matter was to be remanded to the AC for assessment afresh after thorough verification of the records and after affording opportunity of personal hearing to the dealer uninfluenced by any of the observations made by the ADC. 97 VST 153 (Mad) AMMAN BALAJl TWO WHEELERS (PVT.) LTD. v. AC (CT), OMALUR ASSESSMENT CIRCLE, OMALUR.
Inspection and statement : In a writ petition contending that the entire inspection and the statement recorded, during the course of inspection, was, illegal, without jurisdiction on the ground that no power was conferred on the officer in the rank of a CTO, that the petitioner is not carrying on business within the jurisdiction of the first respondent, nor was registered as a dealer within the assessment circle the Court held that writ of certiorari could not be issued, quashing the inspection report or the seizure mahazar or the statement recorded from the dealer. The documents were seized from the place of business of the petitioner. Therefore, if the petitioner had any reservations on the statement given by it before the enforcement officials, it was open to the petitioner to raise contention before the assessing officer. It was settled law that the assessing officer, while competing the assessment, could not solely be guided by the statement recorded by the enforcement officials. Therefore, the petitioner need not have any apprehension that its rights and remedies would stand foreclosed, if the inspection report and the statement were allowed to stand. The issue relating to jurisdiction was left open to be canvassed by the petitioner as and when notice was issued by the assessing officer. 97 VST 156 (Mad) KADHIR TRADERS v CTO, GROUP-VII, ENFORCEMENT (NORTH), GREAMS ROAD, CHENNAI.
Declaration forms: For failure to produce the C forms relating to interstate sales for the four years, viz., 2006-07 to 2011-12, assessments were completed by the assessing officer and recovery proceedings were initiated for recovering tax arid penalty as assessed on it. Upon receiving communication proposing to conduct auction to bring its property for sale for recovery of the tax dues, the dealer filed a representation under section 84 of the TNVAT Act, 2006 enclosing certain C forms which it claimed represented 75 per cent of the transactions. Before bringing the property of the dealer to sale, the assessing officer was to consider the dealer's representation under section 84 of the Act along with the C forms enclosed in the representation, and pass appropriate orders of revised assessment on the merits and in accordance with law. Till then, the distraint proceedings shall be kept in abeyance. After the passing of such order, the dealer should remit the balance amount of tax and penalty as assessed for the transactions for which C forms were either not produced or rejected or returned, on valid grounds, In case of failure by the dealer to remit it, the respondents would be permitted to proceed further with the distraint proceedings. 97 VST 182 (Mad) GTR EXPORTS v. ASSISTANT COMMISSIONER (CT), HOSUR (SOUTH), HOSUR.
Refund: The petitioner-dealer was issued a notice of a refund order in form P for the assessment year 2013-14, of the excess of tax collected from the dealer estimated at Rs. 39,33,672. Since no action was taken pursuant thereto, the dealer filed a writ petition which the court disposed of directing the CTO to consider the representation. However, that order had not been complied with by the CTO who issued a notice based on certain queries raised by the DC. The Court in a writ petition filed, held that it was not clear under which provision of law, the DC had issued the proceedings calling upon the CTO to issue the notice. In the absence of any statutory powers, the proceedings of the DC had to be held to be without jurisdiction. Nevertheless, the dealer sent a detailed objection and in spite of having received such a reply, instead of granting refund, the CTO had addressed a letter to the Additional Commissioner, PR as to what had to be done in the matter. There was no statutory sanction to such procedure being adopted by the respondent. Even assuming that there was some manual of procedures formulated by the Commercial Taxes Department, which obviously had no statutory force, assuming that the Commissioner came to a conclusion that the explanation offered by the dealer to the queries raised by the DC was incorrect and unacceptable and he passed the order that would amount to reviewing the order of assessment which undoubtedly the Act did not contemplate. The procedure adopted by the CTO as well as the DC (CT) was wholly illegal. The notice was set aside and the CTO was directed to effect refund of the tax.
Form XVII: The dealer and HLL are registered dealers in the State of TN. Instruction was given by HLL to the dealer to deliver the product to a factory at Ranipet, job-worker. The job-worker had a manufacturing facility at Ranipet and had the requisite licences and registration. The linear alkyi benzene sold by the dealer was used as a raw material in the manufacture of acid slurry and such manufacturing activity took place within the State of TN. The contract of sale was completed upon delivery of the goods at Ranipet within the State of Tamil Nadu. The seller, namely, the dealer had no contractual or other obligation to take the goods to another State. Thus, when the transaction /sale concluded within the State at Ranipet, which was an additional place of business of HLL, undoubtedly, the transaction was an intra-State sale and the dealer was entitled to avail of the concessional rate of tax on submission of form XVII declaration.  95 VST 118 (Mad) TAMILNADU PETROPRODUCTS LTD v. AC (CT), FAST TRACK ASSESSMENT CIRCLE II.
Alternative remedy: While coming to the conclusion, on the alleged adoption of wrong methodology followed by Inspecting officials, the Assessing officer had observed that in the absence of the correct figures, there was no other alternative except to adopt the figures as furnished by the dealers at the time of inspection. Therefore, it could not be said that the AO had totally ignored the contentions raised by the dealer. Since the contentions raised before court were on factual aspects they could be decided only by the appellate authority and not under Article 226 of the Constitution of India.  95 VST 134 (Mad) HIL LIMITED v. ASSISTANT COMMISSIONER (CT), MADHAVARAM ASSESSMENT CIRCLE.
Natural Justice: Though in taxation matters, court should be slow in interfering with the orders of assessment by issuing writs when the statute provides for a hierarchy of remedies, this rule would not apply, when the assessee is able to establish that the order is in violation of principles of natural justice, suffers from errors apparent on the face of the record or outcome of irrelevant consideration and when perversity is writ large on the face of the order.  95 VST 296 (Mad) HINDUSTAN UNILEVER LTD v. DC (CT)-II, LTU, EGMORE.
Attachment of property: The property was subject matter of mortgage with the bankers, who were secured creditors and they had brought the property for sale. The petitioner's vendor had purchased the property for valid consideration through the DRT ebts Recovery Tribunal and a certificate of sale was issued in his favour. As long as the said certificate of sale had not been cancelled or modified, the first respondent Department could not have any lien over the property.  95 VST 308 (Mad) ANSARI v. CTO, KOYAMBEDU ASSESSMENT CIRCLE.
Audit report : When a writ petition was moved to issue a writ of certiorari to call for the records on the file of the respondent and to quash the same, contending that though the petitioner had submitted form WW report on December 30, 2015 for the year 2014-15 and had stated that it had been regularly submitting the monthly returns, the respondent had not appreciated the audit report and had taken four years total turnover for framing an assessment dated November 30, 2015, the court allowed the petition, set aside the order dated November 30, 2015 and remanded the matter back to the respondent with a direction to receive form WW and decide the matter afresh, after giving an opportunity of personal hearing to the petitioner.  95 VST 331 (Mad) CONCRETE ADDITIVES AND CHEMICALS PVT. LTD. v. AC (CT) FAC, THIRUVALLUR ASSESSMENT CIRCLE.
Input Tax Credit: Non-intimation of change in constitution of an entity is an irregularity and not an illegality and the assessing authority is not correct in reversing the entire input tax credit on the ground for not informing the change in constitution and obtaining fresh registration. [2016-17] 22 TNCTJ167 (MAD) Sri Kamatchi Gas Service Vs AC (CT) Kanchipuram Assessment Circle.
Rectification: A rectification order causes grievance to a dealer, then it is an appealable order u/s 55(4) of the TNGST Act and if the rectification request is successful, then any rectification order in this regard cannot be appealed. [2016-17] 22 TNCTJ 255 (MAD) P C W Castings Pvt Ltd Vs ADC CT Chennai (East).
Clarification and penalty: A clarification cannot go beyond the scope and ambit of the provision of law. The levy of penalty without considering the bona fides of the assessee cannot be sustained.  68 VST 406 (Mad) STATE OF TAMIL NADU v. SREEJEE AND CO.

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