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3. The petitioner in these cases is a dealer in lubricants and has a valid TIN number issued by the respondent. The three assessment years relate to 2008-09, 2009-10 and 2010-11. In all these cases, the petitioner purchased lubricants from M/s Classic Enterprises, falling under the jurisdiction of the Assistant Commissioner (CT), Palayamkottai Assessment Circle, and the seller-M/s Classic Enterprises has a valid TIN No.3383556355. It appears that the enforcement wing officials of the first respondent-Department conducted an inspection on 13.7.2010 and on verification of the returns, it was found that the dealer at Palayamkottai Assessment Circle, namely, M/s Classic Enterprises, had not filed the monthly returns in Form-I and also not paid the tax to the department for the relevant period. Therefore, while accepting that the petitioner-dealer had paid the tax to the selling dealer, pre-revision notices were issued on 7.12.2012 in respect of each assessment year contending that input tax credit should be reversed on the failure of selling dealer in paying tax. The petitioner filed their detailed objections to the pre-revision notices stating that at the time of self-assessment under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006 (for short, "the TNVAT Act"), all the records relevant for claiming the input tax credit have been filed as annexure to the documents and they have been accepted by the Department. Even in the pre-revision notices, it is an admitted fact that the petitioner herein had paid the tax. The allegation is only against the selling dealer stating that they had not filed the Form-I returns nor paid the tax to the department. Therefore, it was contended by the petitioner that in terms of Section 19(1) of the TNVAT Act, they have complied with the requirement for claiming input tax credit at the time of self-assessment itself. The first respondent, after three years, has come to a different conclusion that the petitioner is not entitled to avail the input tax credit on the plea that the selling dealer did not file Form-I returns and did not pay the tax. Hence, the revision notices and the proposed penalty were hotly contested as improper, arbitrary and contrary to the provisions of the TNVAT Act. To further clarify the position, the specific objections of the petitioner are as follows:-

4. Overruling these objections, the Assistant Commissioner (CT), Vadapalani-I Assessment Circle, relying upon Section 19(1), came to the conclusion that in order to claim input tax credit, the petitioner should have established that the tax due on such purchase had been paid in the manner prescribed and since the petitioner-dealer failed to prove that input tax credit on purchases from the selling dealer at Palayamkottai was paid by the selling dealer in the manner prescribed, the petitioner is not entitled to avail input tax credit. The authority also went on to hold that merely holding that tax would have been paid will not help the buyer to claim ITC credit. According to the department, the tax due on purchases were not paid by the selling dealer and that was admitted by the dealer before the enforcement wing officials at the time of inspection. In the impugned orders, the first respondent has stated that after inspection on 13.7.2010, when the enforcement officials pointed out the said mistake of the selling dealer to the petitioner, the petitioner herein has not raised an issue with their dealer, and the proof for such objection to the selling dealer has not been filed along with the objections. Peculiarly, the first respondent-authority went on to hold as follows:-

10. For all the above reasons, the impugned orders are set aside and the writ petitions are allowed. Consequently, M.P.Nos.1 of 2013 are closed. No costs. 

Index     : yes							29.01.2013
Internet : yes

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To

1. The Assistant Commissioner (CT)
    Vadapalani-I Assessment Circle
    Chennai 600 106

2. The Assistant Commissioner (CT)
    Palayamkottai Assessment Circle
    Palayamkottai

R.SUDHAKAR, J.

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W.P.Nos.2036 to 2038 of 2013



















29.01.2013