Madras High Court
M/S.V.V.V & Sons Edible Oils Limited vs The Commercial Tax Officer-I on 13 March, 2015
Author: B.Rajendran
Bench: B.Rajendran
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 13.03.2015 CORAM THE HONOURABLE MR.JUSTICE B.RAJENDRAN W.P(MD)Nos.15322 of 2013 and W.P(MD)Nos.15323 to 15342 of 2013 and W.P(MD)Nos.13897 to 13913 of 2013 and M.P(MD)Nos.1,1,1,1,1 and 1 of 2013 and 1,1,1,1,1,1,1,1,1,1,1,1,1,1,1 ad 1 of 2013 and 1,1,1,1,1,1,1,1,1,1,1,1,1,1,1,1 and 1 of 2013 M/s.V.V.V & Sons Edible Oils Limited, represented by its Director, 443, Bazaar, Virudhunagar ..Petitioner in W.P(MD)No.15322 of 2014 Vs The Commercial Tax Officer-I, Virudhunagar Assessment Circle, virudhunagar. ..Respondent in W.P(MD)No.15322 of 2014 Prayer IN W.P(MD)No.15322 of 2013 Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Certiorari calling for the records of the respondent in his proceedings in TIN NO.33175721640/2010-2011 and to quash the notice dated 30.08.2013 issued therein. !For Petitioner :Mr.R.L.Ramani in all cases Senior Counsel for M/s.Raja Jeya Chandra Paul For Respondent :Mr.A.Muthukaruppan in all cases Addl.Govt.Pleader :COMMON ORDER
All these Writ Petitions are filed challenging the notice calling upon the Petitioner to pay the tax as the selling dealers has not paid the taxes correspondingly through ITC adjustment has sought to be reversed.
2.According to the Petitioner, his duty is only to show that the purchaser has paid the tax. If the tax has not been paid by the selling dealers, there is no power for the authorities to revoke the input tax as per the judgement reported in 60 VST 283. Therefore he would only contend that the authority have no power to revoke the input tax credit if the selling dealers estahlishes the payment of tax at the time of purchase and hence the notice issued by the authorities is invalid.
3.The respondent has filed a counter affidavit and submitted that it is after all a notice and it is for them to produce the purchase tax and admittedly,the Petitioner has not produced the connected documents to prove the tax payments and straightway filed these Writ Petitions and therefore there is no violation of principles of natural justice and hence the Writ Petitions deserve no consideration and are liable to be dismissed.
4.Even a reading of the very notice impugned herein reveals as follows:
?You have claimed ITC of Rs.154009.00/- and adjusted towards the tax due on the sales during the year 2010-11. But the seller has not paid the tax on the sales at the other end. So you are liable to pay the tax of theabove said amount of Rs.154009-adjusted as input tax credit under the VAT Act' 2006. Hence you are requested to pay the above said amount of Rs.154009/- along with interest within fifteen days of receipt of this notice, failing which action will be taken to collect the amount as per the provisions of the TNVAT Act'2006.
5.It is very clearly stated that if the selling dealer has not paid the collected tax and that liability has to be fastened on the selling dealer and it cannot be mulcted on the Petitioner-purchasing dealer who had shown the proof of payment of tax on the purchase made. In this connection, the learned counsel for the Petitioner relies on (2013) 60 VST 283(Mad), relevant portion of which reads as follows:
?10.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 notice and the orders clearly state 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.
11.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 mulcted on the Petitioner-purchasing dealer, which had shown proof of payment of tax on purchase made.
12.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 relates to incorrect, incomplete or improper calim of input tax credit by the dealer.It is not so in these cases. In the present case, the Petitioner-delaer, 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-delaer 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 rpesent action has been initiated, namely, ihvoking sub-section(16) of Sectin(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 be set aside.?
6. The above facts would clearly state that if the selling dealer has not paid the correct tax then the liability can only be fastened on the selling dealer and not on the purchasing dealer.
7.Following the same, the Petitioner is directed to produce all the relevant purchase documents for all these matters for verification. If on verification any tax is not paid for the purchase, it is open to the authority to levy the tax and the Petitioner is liable to pay. The Petitioner is directed to treat this as a show-cause notice and directed to give proper explanation to the authorities and on such explanation being made, the authorities are directed to pass appropriate orders on merits and in accordance with law.
8.With the above direction the Writ Petitions are disposed of. No costs.Consequently, connected Miscellaneous Petitions are closed.
13.03.2015 Index : yes/No Internet:Yes/No vsn To The Commercial Tax Officer-I, Virudhunagar Assessment Circle, virudhunagar.
B.RAJENDRAN,J vsn W.P(MD)Nos.15322 to 15342 of 2013 and W.P(MD)Nos.13897 to 13913 of 2013 and M.P(MD)Nos.1,1,1,1,1 and 1 of 2013 and 1,1,1,1,1,1,1,1,1,1,1,1,1,1,1 ad 1 of 2013 and 1,1,1,1,1,1,1,1,1,1,1,1,1,1,1,1 and 1 of 2013 13.03.2015