Madras High Court
Slo Steels Limited vs The Assistant Commissioner (St) on 2 September, 2022
Author: R. Mahadevan
Bench: R. Mahadevan, Mohammed Shaffiq
WA.No.1493 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 02.09.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
Writ Appeal No.1493 of 2022
and
CMP. No. 9801 of 2022
---
SLO Steels Limited,
represented by its Director,
Mr.Pratap Kumar Rakesh,
403/D, T.H. Road,
Thiruvottiyur, Chennai. .. Appellant
Versus
The Assistant Commissioner (ST),
Thiruvottiyur Assessment Circle,
Integrated Commercial Taxes Complex,
32, Elephant Gate Bridge Road,
Chennai-3. .. Respondent
Writ Appeal filed under Clause 15 of the Letters Patent against the order
dated 21.04.2022 passed by the learned Judge in W.P. No. 9659 of 2022.
For Appellant : Mr. R. Senniappan
For Respondent : Mr. R.Siddharth,
Govt. Advocate (Taxes)
https://www.mhc.tn.gov.in/judis
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WA.No.1493 of 2022
JUDGMENT
This Writ Appeal arises from the order dated 21.04.2022 passed by the learned Judge in W.P. No. 9659 of 2022.
2. The brief facts leading to the filing of this appeal would run thus:
2.1. The appellant is a registered dealer under the Tamil Nadu Value Added Tax Act, 2006 (in short, “the TNVAT Act”) as also under the Central Sales Tax Act, 1956, (in short, “the CST Act”) and they engaged in the manufacture of iron and steel.
2.2. According to the appellant, for the assessment year 2016-2017, they filed their return of income indicating the total taxable turnover of Rs.92,66,47,769/- and paid output tax of Rs.18,68,978.50 after adjusting the Input Tax Credit (ITC) claimed by them. While so, on 10.01.2017, the place of business of the assessee was inspected by the officers of the Enforcement Wing, during which, certain documents were seized and statements were recorded. Subsequently, based on the audit observations, the respondent sent a notice dated 29.11.2017, to which the appellant submitted their objections on 15.04.2018. Upon receipt of the same, the respondent directed the appellant to produce the original purchase invoices, for which, the appellant sought time.
2.3. However, the respondent confirmed the proposed assessment by order dated 17.09.2021, which was challenged by the appellant by filing https://www.mhc.tn.gov.in/judis 2/8 WA.No.1493 of 2022 WP.No.24597 of 2021. By order dated 14.12.2021, the said writ petition was disposed of, by setting aside the order of assessment and remanding the matter to the respondent for fresh consideration, after providing an opportunity of being heard to the appellant.
2.4. Pursuant to the aforesaid order, the appellant appeared before the respondent and submitted a detailed reply along with documentary evidence.
Without properly considering the same, the respondent passed the fresh assessment order dated 25.01.2022, on a different footing that the business carried by the assessee is a typical example of bill trading activity where there is no actual movement of goods at all proved by way of payment of transportation charges and loading/ unloading charges. The said order of assessment was questioned by the appellant by filing WP.No.9659 of 2022.
2.5. The learned Judge, after hearing the rival contentions, dismissed the aforesaid writ petition by observing as follows:
“11. After the remand order passed by this Court, two times opportunity was given to the petitioner and twice notices were given and both times the responses have been given by the petitioner dealer.
12. First time, the documents sought for by the Revenue had been given. When further time was sought for especially to substantiate the movement of goods from seller to buyer, those transport documents were sought for and the same were not filed by the petitioner by stating the reason that, both buyer and seller are located in the same campus ie., sister concern and hence there was no separate movement or transportation and no separate charges had been incurred by the seller dealer or by the petitioner in transporting the goods.
13. Only based on this stand taken by the petitioner dealer, the Revenue after having considered the said documents filed by them, has come to the conclusion, of course rightly, that this kind of goods movement https://www.mhc.tn.gov.in/judis 3/8 WA.No.1493 of 2022 between two sister concerns which are located in the same campus is nothing but a bill trading.
14. In this context, they pointed out that 90% of their purchases have been effected from their sister concern Tvl.SLO Industries Ltd., amounting to Rs.76,28,07,935/- out of their total purchase value of Rs.89,19,32,756/-
which is situated in the same business premises occupied by the dealer, where there have been no movement of goods as accepted by the dealer himself.
15. Therefore, the Revenue has come to a further conclusion that, this type of purchases / sales between group companies / related persons situated within the same premises without actual movement of goods is the typical model for bill trading activities, where there would be no bank statements, proper entries in Annexures to Form I returns and ledger accounts, the quantum of goods purchase would be sold as such in the same vehicle with a meager value addition less than 1% but there would not be actual involvement of goods at all and these type of activities enable the parties involved to circulate undue ITC among themselves and other groups.
16. This reasoning found out, based on the records, which were produced by the petitioner dealer, in the considered opinion of this Court, cannot be said to be a conclusion arrived at without any documents.
17. When goods movements were asked for, for which the transport documents were directed to be produced, the reason stated for non production of such documents by the dealer is that, the goods movement was between the purchaser and seller, which were sister concerns located in the same premises , then it is clear to come to a safe conclusion as has been arrived at by the Revenue, which is reflected in Para 7 of the impugned order. Therefore, this Court has no hesitation to hold that the impugned order is fully justifiable and sustainable and there is no reason, whatsoever available before this Court to show its indulgence for interfering with the said impugned order.
18. The petitioner also seems to have not filed any appeal against the impugned order and since it is also canvassed on merits before this Court, that has also been dealt with, which is inevitable, because of the points raised by the learned counsel for the petitioner.
19. For all the above reasons, this Court is of the view that the impugned order is to be sustained and the writ petition is liable to be rejected. Accordingly, the writ petition is dismissed. However, there shall be no order as to costs. Consequently, connected miscellaneous petition is also dismissed."
Feeling aggrieved, the appellant / assessee is before this court with the present writ appeal.
3. Though the appellant / assessee raised very many grounds https://www.mhc.tn.gov.in/judis 4/8 WA.No.1493 of 2022 assailing the orders impugned in this writ appeal as well as in the writ petition, the learned counsel for the appellant submitted that in order to show their bona fide, the appellant, without prejudice to their right, has paid a sum of Rs.40 lakhs by way of demand draft dated 25.08.2022 bearing No. 370531 drawn on Yes Bank Limited, Mumbai, in favour of the Assistant Commissioner (ST) (FAC), Thiruvottiyur Assessment Circle, which was also received and acknowledged by the respondent. Therefore, the learned counsel submitted that it would suffice, if a direction is issued to the respondent/assessing officer to afford an opportunity to the appellant to produce all the relevant materials in support of their claim.
4. Conceding the payment of Rs.40,00,000/- made by the appellant / assessee, the learned Government Advocate (Taxes) appearing for the respondent submitted that the respondent is now inclined to grant one more opportunity to the appellant to produce the available documentary evidence to substantiate their claim and thereafter, pass orders, on merits.
5. In view of the above submissions made by the learned counsel for both sides and as agreed by them, this court, without going into the merits of the orders impugned herein as well as in the writ petition, sets aside the same https://www.mhc.tn.gov.in/judis 5/8 WA.No.1493 of 2022 and remands the matter to the respondent for fresh consideration. The appellant is directed to produce all the required documents to the respondent / assessing officer within a period of four weeks from the date of receipt of a copy of this judgment. On receipt of the documents, the respondent shall consider the same and pass appropriate orders, on merits and in accordance with law, after affording an opportunity of being heard to the appellant, as expeditiously as possible. However, it is made clear that the appellant shall not seek any adjournment for production of the documentary evidence; and in the event of failure on the part of the appellant to produce the documents within the time stipulated by this court, then the order dated 25.01.2022 passed by the respondent / assessing officer, which was impugned in the writ petition, shall stand restored to file.
6. The writ Appeal is disposed of in the above terms. No costs. Consequently, the connected miscellaneous petitions is closed.
[R.M.D.,J.] [M.S.Q.,J.]
02.09.2022
msr/rsh
https://www.mhc.tn.gov.in/judis
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WA.No.1493 of 2022
To
The Assistant Commissioner (ST),
Thiruvottiyur Assessment Circle,
Integrated Commercial Taxes Complex,
32, Elephant Gate Bridge Road,
Chennai-3.
https://www.mhc.tn.gov.in/judis
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WA.No.1493 of 2022
R. MAHADEVAN, J
and
MOHAMMED SHAFFIQ, J
msr/rsh
W.A.No.1493 of 2022
02.09.2022
https://www.mhc.tn.gov.in/judis
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