Madras High Court
The Assistant Commissioner (Ct) vs M/S. Aassaan Global Trade on 6 July, 2022
Author: R. Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
W.A.Nos. 3489 to 3491 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.07.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
W.A.Nos. 3489 to 3491 of 2019
and
CMP. Nos. 22364, 22366, 22369, 22370 and 22373 of 2019
The Assistant Commissioner (CT),
T.Nagar (East) Assessment Circle,
46, Greenways Road, Chennai - 28.
.. Appellant in all WAs
Versus
M/s. Aassaan Global Trade,
Rep. by its Prop.M.V.A.Seetharamaraju,
Flat No.32, 3rd floor, Rishikesh Apartment,
38, G.N.Chetty Road,
T.Nagar, Chennai - 17. .. Respondent in all WAs
Writ Appeals filed under Clause 15 of Letters Patent against the common
order dated 17.10.2014 passed by the learned judge in W.P.Nos. 25996 to 25998
of 2014.
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https://www.mhc.tn.gov.in/judis
W.A.Nos. 3489 to 3491 of 2019
For Appellant : Mr.V.Prashanth Kiran,
Government Advocate in all cases
For Respondent : Mr. S.Ramanathan in all cases
COMMON JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J.) The appellant/Revenue has come forward with these intra-court appeals questioning the validity and correctness of the common order dated 17.10.2014 passed by the learned Judge, in WP. Nos.25996 to 25998 of 2014.
2.The respondent / assessee is a registered dealer under the Tamil Nadu Value Added Tax Act (in short, "the TNVAT Act") and the Central Sales Tax Act (in short, "the CST Act") and is engaged in the business of Home appliances, Dhall and Yarn, etc. According to the assessee, they filed its monthly returns for the years 2010-2011, 2011-2012 and 2012-2013. While so, their business premises was inspected by the Enforcement Wing of the Commercial Taxes Department on 11.12.2013 and it was verified through website about the purchase and sales reported in the monthly returns; and it was found that the assessee had reported huge purchases, but they have not actually sold the goods 2/7 https://www.mhc.tn.gov.in/judis W.A.Nos. 3489 to 3491 of 2019 for such huge value. Further, the sellers, who said to have sold the goods, have not declared or filed monthly returns. That apart, the assessee purchased and availed Input Tax Credit from a dealer bearing TIN No.33741562791, but the said purchases were made from one Tvl.Aassaan Commodity Trade bearing TIN No.337414627191. Therefore, the assessing officer proposed to reverse the Input Tax Credit availed by the assessee under Section 19 of the TNVAT Act, besides proposing to levy penalty under section 27(4) of the TNVAT Act. The assessee submitted their explanation/objection on 07.07.2014. However, the Assessing Officer, without providing sufficient opportunity to the assessee to substantiate their submissions, passed the assessment orders, which are in complete disregard to the principles of natural justice. Aggrieved against the revision orders of assessment, the assessee invoked the writ jurisdiction under Article 226 of the Constitution of India by filing WP.Nos.25996 to 25998 of 2014 to quash the same.
3.By order dated 17.10.2014, the learned Judge allowed the aforesaid writ petitions by setting aside the orders of revision of assessment. The relevant portion of the said order is extracted below:
"6. In the light of the above decision, the observation made by the respondent in the impugned order is wholly unsustainable. Further in the 3/7 https://www.mhc.tn.gov.in/judis W.A.Nos. 3489 to 3491 of 2019 case of Sri Vinayaga Agencies vs. Assistant Commissioner (CT), Vadapalani-I Assessment Circle, Chennai and another reported in (2013) 60 VST 283 (Mad), this Court held that there is no power with the assessing authority to revoke input tax credit on ground selling dealer has not paid tax and it was held that at the time of filing the self-assessment return under Section 22 (2), the petitioner-dealer had followed rule 10 (2) of the Tamil Nadu Value Added Tax Rules, 2007 and therefore, could not be said to have wrongly availed of input tax credit wrongly. Section 19 (1) states that input- tax credit can be claimed by a registered dealer, if he establishes that the tax due on such purchase has been paid by him in the manner prescribed and that was accepted at the time when the self-assessment was made. The pre- revision notices and the orders clearly stated that the petitioner-dealer had paid the tax to the selling dealer. If that be the case, the petitioner's case squarely fell under the proviso to section 19(1) of the Act. It was another matter that the selling dealer had not paid the collected tax. The liability had to be fastened on the selling dealer and not on the petitioner-dealer which had shown proof of payment of tax on purchases made. The orders were liable to be set aside. That sub-section (16) of section 19 states that the input-tax credit availed 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.
7. The above referred decision also squarely applies to the case on hand and by applying aforesaid mentioned decisions, it is to be necessarily held that the impugned orders are wholly unsustainable in law. That apart there is also violation of principles of natural justice as much as no opportunity of personal hearing was granted to the petitioner.
8. In the result, the writ petitions are allowed and the impugned orders of revision of assessments are quashed. Consequently connected miscellaneous petitions are closed. No costs."
Aggrieved by the above order passed by the learned Judge, the present appeals have been filed by the Revenue.
4.Heard both sides. It could be seen from the documents enclosed in the typed set of papers that the issue involved herein is with respect to mismatch between the turnover declared by a dealer in the return and the information 4/7 https://www.mhc.tn.gov.in/judis W.A.Nos. 3489 to 3491 of 2019 obtained by the Department through their Departmental webportal. Having found so, the assessing officer called for the objections from the assessee and thereafter, passed the orders of revision of assessment for the assessment years in question, rejecting the ITC claimed by the assessee. When the said orders were put to challenge before the writ court, the learned Judge referred to the earlier order of this court in Althef Shoes P. Ltd v. Assistant Commissioner (CT), Valluvarkottam Assessment Circle, Chennai [(2012) 50 VAR 179 (Mad)], and Sri Vinayaga Agencies v. Assistant Commissioner (CT), Vadapalani-1 Assessment Circle, Chennai [(2013) 60 VST 283 (Mad)] and allowed the writ petitions by setting aside the orders of revision of assessment. Therefore, these appeals.
5.During the course of argument, the learned Government Advocate appearing for the appellant has brought the notice of this Court to the Circular No.5 of 2021 dated 24.02.2021 issued by the Principal Secretary / Commissioner of Commercial Taxes, Chepauk, Chennai, in and by which, certain procedures have been stipulated with regard to the cases relating to mis-match report. Therefore, the learned Government Advocate sought to remit the matter back to the appellant for fresh consideration, for which, the learned counsel appearing for the respondent/assessee, has no serious objection. 5/7 https://www.mhc.tn.gov.in/judis W.A.Nos. 3489 to 3491 of 2019
6.In the light of the above submissions made by the learned counsel for both sides, the order dated 17.10.2014 passed by the learned Judge in WP Nos. 25996 to 25998 of 2014, which is impugned herein, is set aside and the matters are remanded to the Assessing Officer for fresh consideration, after verifying the documentary evidence produced by the assessee. Such an exercise shall be completed and pass appropriate orders, on merits and in accordance with law and also in the light of the circular no.5/2021 (LW10/12521/2016) dated 24.02.2021 issued by the Principal Secretary/Commissioner of Commercial Taxes, Chennai, after affording due opportunity of hearing to the respondent / assess, as expeditiously as possible.
7.These writ appeals are disposed of in the above terms. No costs. Consequently, connected miscellaneous petitions are closed.
(R.M.D., J.) (M.S.Q., J.)
06.07.2022
Internet : Yes
Index : Yes/No
av
To
The Assistant Commissioner (CT),
T.Nagar (East) Assessment Circle,
46, Greenways Road, Chennai - 28.
6/7
https://www.mhc.tn.gov.in/judis
W.A.Nos. 3489 to 3491 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
av
W.A.Nos. 3489 to 3491 of 2019
06.07.2022
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https://www.mhc.tn.gov.in/judis