M/S.Jasmine Towels Private LTD vs. The Assistant Commissioner(CT)

Held

The Court held that the pre-revisional notices dated August 18, 2014, were not conclusively established as having been duly served on the writ petitioner on August 31, 2014. This finding was based on the explanation to Rule 19(1)(a) of the TNVAT Rules, which requires an endorsement by the person delivering the notice as proof of service. The Court observed that such an endorsement was absent in the records produced. Consequently, the Court found an infraction of the common proviso to Section 27(1) and 27(2) of the TNVAT Act, which mandates a reasonable opportunity to show cause against any order passed under these sections. The Court set aside the impugned orders dated June 30, 2015, without expressing any opinion on the merits of the matter. The petitioner was directed to respond to the pre-revisional assessment notices within a fortnight, and thereafter, the Assessing Officer was to proceed with the legal drill under Section 27 of the TNVAT Act and pass orders expeditiously, within two months from December 15, 2021.

Facts

The petitioner, M/s. Jasmine Towels Private Limited, a manufacturer and exporter, filed four writ petitions challenging revisional orders dated June 30, 2015, passed under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) for the assessment years 2010-11, 2011-12, 2012-13, and 2013-14. The petitioner contended that they had deemed assessments under Section 22(2) of the TNVAT Act. Following an inspection on January 21, 2014, where it was pointed out that the petitioner had not reversed Input Tax Credit (ITC) for manufacturing exempted goods as per Section 19(5)(a) of the TNVAT Act, pre-revisional notices dated August 18, 2014, were issued. The petitioner claimed these notices were not served, while the respondent asserted they were served on August 31, 2014. The court had previously directed the respondent to produce records to resolve this dispute.

Key Issues

1. Whether the pre-revisional notices dated August 18, 2014, were duly served on the writ petitioner in accordance with Rule 19 of the Tamil Nadu Value Added Tax Rules, 2007, as contended by the petitioner, or as asserted by the respondent and recorded in the impugned orders? This issue turns on the interpretation and application of Rule 19(1)(a) and its explanation. Contentions: Petitioner: Argued that the pre-revisional notices were not served on them and that the signatures on the purported acknowledgements were not of any authorized representative. They relied on Rule 19 of the TNVAT Rules, 2007, specifically highlighting the requirement of an endorsement by the delivery person as proof of service under Rule 19(1)(a). Respondent: Contended that the pre-revisional notices were duly served on the writ petitioner, asserting this in their counter-affidavit and in the impugned orders. They submitted that the service was effected under Rule 19(1)(a) of the TNVAT Rules.