Madras High Court
M/S.Gee Constructions vs The Assistant Commissioner(Ct) on 9 January, 2020
Author: C.Saravanan
Bench: C.Saravanan
W.P.Nos.29083 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 09.01.2020
CORAM:
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.Nos.29083 of 2015
and
M.P.Nos.1 & 2 of 2015
M/s.Gee Constructions
(Now Defunct)
Rep by its Erstwhile partner
Mr.C.Rajesh Kumar,
No.45, Mettu Street, Thirukazhukundram,
Kancheepuram 603 109. ... Petitioner
Vs.
1.The Assistant Commissioner(CT),
Chengalpattu Assessment Circle,
Chengalpattu.
2.The Assistant Commissioner(CT),
Thirukazhukkundram Assessment Circle,
Thirukazhukkundram 603 109. ... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for
the issuance of a Writ of Certiorari, to call for the impugned proceedings of the
first respondent in TIN/33271604614/2009-2010 dated 28.03.2014, and quash the
same as passed without granting reasonable opportunity to the petitioner,
contrary to section 19(1) of the TNVAT Act read with Rule 10(2) of the TNVAT Rules
and also against the law laid down by this Court in the case of M/s.Althaf Shoes (P)
Ltd, Assistant Commissioner (CT) Valluvarkottam Assessment Circle, Chennai
reported in 50 VST 179 in the case of M/s.Jinsasan Distrbutors Vs.Commercial Tax
1/8
http://www.judis.nic.in
W.P.Nos.29083 of 2015
Officer(CT) Chindatripet Asst. Circle reported in 60 VST 256 in the case of M/s.Sri
Vinayaga Agencies reported in 60 VST 283 in the case of Aassan Global Trade in
W.P.Nos.25996 to 25998/2014 and also in the case of M/s.Infiniti wholesale Limited
in W.P.No.9265/2013.
For Petitioner : Mr.P.Rajkumar
For Respondents : Mr.R.Swarnavel
Government Advocate (T)
ORDER
The petitioner has challenged the impugned order dated 28.03.2014 passed by the respondent. According to the petitioner, the petitioner was regular in paying tax under the provisions of the Tamil Nadu VAT Act, 2006. During the period in dispute i.e, assessment year 2009-2010, the petitioner had availed input tax credit under the provisions of Tamil Nadu VAT Act, 2006.
2.A notice dated 21.06.2013 was issued to the petitioner which called upon the petitioner to reverse input tax credit availed by the petitioner on the inputs purchased from seven different dealers for the reasons stated in the said notice. It is the case of the petitioner that when said notice was issued, the petitioner had already closed down on its business and therefore the said notice remained unserved on the petitioner.
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3.According to the petitioner, in the year 2009-2010 there were a few changes in the Constitution of the petitioner's firm and therefore a Deed of Reconstitution of the petitioner's firm was signed on 27.08.2009 as a result of which, one of the partner K.Sundaramoorty resigned and in his place the deponent C.Rajesh Kumar and one B.Narayanan Taparia became the partners of the petitioner's firm.
4.It is submitted that the petitioner firm was eventually dissolved in the year 2014. The deponent C.Rajesh Kumar received a notice dated 03.06.2015 from the respondent calling upon the petitioner to pay the arrears of tax. On enquiring with the respondent, the deponent C.Rajesh Kumar came to know that earlier the impugned order dated 28.03.2014 had been passed pursuant to the above notice.
5. It is submitted that neither notice dated 21.06.2013 was served on the petitioner nor the impugned order dated 28.03.2014 was passed. The petitioner has now become a defunct partnership concern. Learned counsel for the petitioner, therefore, submits that the impugned order is liable to be set aside.
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6.The learned counsel for the petitioner further submits that the issue is no longer res integra on merits and that it is covered by a decision of this Court in the case of Sri Vanayaga Agencies Vs. Assistant Commissioner (CT), Vadapalani-I, Assessment Circle, Chennai and Another reported in [2013] 60 VST 283 (Mad) wherein after considering the provisions of TNVAT Act 2006 and TNVAT Rules 2007 the Court held as under :-
“Therefore, it cannot be said that input-tax credit was wrongly availed.
The provision of section 19(1) clearly states that input-tax credit can be claimed by the registered dealer, provided if the registered dealer establishes that the tax due on such purchase has been paid by him in the manner prescribed. The pre- revision notices and the order clearly stated in paragraph 3 that the petitioner herein had paid the tax to the selling dealer. If that be the case, the petitioner's case squarely falls under the proviso to section 19(1) of the TNVAT Act. That is availed of only by following rule 10(2). It is also not in dispute that the self-assessment has been made under section 22(2) of the TNVAT Act and therefore the petitioner was justified in claiming the input-tax credit.
It is another matter that the selling dealer has not paid the collected tax and that liability has to be fastened on the selling dealer. It cannot be mulcted on the petitioner- purchasing dealer, which had shown proof of payment of tax on purchases made.
Sub-section (16) of section 19 states that the input- tax credit availed of 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 4/8 http://www.judis.nic.in W.P.Nos.29083 of 2015 relates to incorrect, incomplete or improper claim of input-tax credit by the dealer. It is not so in these cases. In the present case, the petitioner-dealer, admittedly, had paid the tax to the selling dealer and claimed input-tax credit and that was accepted at the time when the self-assessment was made. Even the pre-revision notices and the orders under challenge fairly state that the petitioner-dealer had paid tax to the dealer. It is, therefore, for the Department to proceed against the selling dealer for recovery of tax in the manner known to law. The provision under which the present action has been initiated, namely invoking sub-section (16) of section 19, does not appear to be correct on the admitted facts as above. All the revision orders revising the input-tax credit on the admitted case of tax having been paid to the selling dealer, therefore, are found to be totally incorrect, erroneous and contrary to the provisions of the TNVAT Act and Rules. As a result, all the orders are liable to the set aside.”
7.The learned counsel for the petitioner further submits that the above decision has been further affirmed by a Division Bench of this Court in the case of Assistant Commissioner(CT), Presently Thiruverkadu Assessment Circle, Kolathur, Chennai Vs.Infiniti Wholesale Ltd reported in [2017] 99 VST 341 (Mad).
8.Per contra, learned Government Advocate appearing for the respondent submits that the impugned notice is well reasoned and requires no interference. He further submits that, the petitioner had availed credit when no tax was paid by the selling dealer. He further submits that though the notice was 5/8 http://www.judis.nic.in W.P.Nos.29083 of 2015 sought to be served on the petitioner it could not be served as he had closed his business, and further the present Writ Petition is liable to be dismissed.
9.Heard learned counsel for the petitioner and the learned Government Advocate appearing for the respondents.
10.On a perusal of the records and considering the decisions cited by the learned counsel for the petitioner, prima facie it appears that the issue in question is squarely covered by the two decisions cited by the learned counsel for the petitioner. Since, the impugned order has been passed without hearing the petitioner there is a manifest violation of principles of natural justice. I am therefore inclined to quash the impugned order.
11.Accordingly, the impugned order dated 28.03.2014 is quashed and the case is remitted back to the respondent to pass a speaking order in accordance with law following the two cited case laws. Petitioner is also given an opportunity to file its reply to the notice dated 21.06.2013 within a period of 30 days after the receipt of this order.
12.The petitioner shall be heard by the respondent before passing 6/8 http://www.judis.nic.in W.P.Nos.29083 of 2015 speaking such order. Notice of hearing shall be served at the address of the deponent given in the affidavit filed in support of the petition at No.45, Mettu Street, Thirukazhukundram, Kancheepuram District-603 109, and such notice shall be sufficient service of notice on the petitioner.
13.The Writ Petition is allowed with the above direction. No costs.
Consequently, connected Miscellaneous Petitions are closed.
09.01.2020 Index : Yes / No Internet : Yes/ No jas To
1.The Assistant Commissioner(CT), Chengalpattu Assessment Circle, Chengalpattu.
2.The Assistant Commissioner(CT), Thirukazhukkundram Assessment Circle, Thirukazhukkundram 603 109.
7/8 http://www.judis.nic.in W.P.Nos.29083 of 2015 C.SARAVANAN, J.
jas W.P.No.29083 of 2015 and M.P.Nos.1 & 2 of 2015 09.01.2020 8/8 http://www.judis.nic.in