Sri Ram Gunny Store vs. The Commissioner Of Commerical

Held

The Court held that the impugned order was liable to be quashed on two grounds. Firstly, concerning the mismatch from the department's website, the Court found that the assessing authority had failed to conduct an enquiry with the other end dealer, a procedure mandated by the decision in JKM Graphics Solutions. Therefore, on this ground, the Court had to interfere with the order. Secondly, regarding the reversal of input tax credit due to non-production of 'C' Forms for interstate sales, the Court followed the decision in Bharath Traders. This decision held that the amendment broadening the grant of input tax credit to transactions with unregistered dealers corrected an anomaly and should be effective retrospectively from the inception of the Act. The Court quashed the impugned order in its entirety but ordered a remand only in respect of the mismatch component. The writ petition was allowed.

Facts

Tvl. Sri Ram Gunny Store (the petitioner) filed a writ petition challenging an order dated 28.03.2018 passed by the Assistant Commissioner (CT), Theni (the respondent), imposing tax and penalty for the assessment year 2014-15. The impugned order identified two defects: a mismatch in particulars from the department's website and the reversal of input tax credit due to non-production of 'C' Form declarations for interstate sales. The respondent argued that the writ petition was not maintainable as the petitioner had not availed the alternative remedy. The petitioner contended that the assessing authority failed to conduct an enquiry for the website mismatch and that the reversal of input tax credit was erroneous.

Key Issues

1. Whether the impugned order is liable to be quashed on the ground that the assessing authority failed to conduct an enquiry with the other end dealer regarding the mismatch ascertained from the department's website, as mandated by the decision in JKM Graphics Solutions Vs. The Commercial Tax Officer (2017) 99 VST 343? 2. Whether the reversal of input tax credit for non-production of 'C' Form declarations for interstate sales is liable to be quashed, in light of the decision in Bharath Traders vs. The Commissioner of Commercial Taxes and Another (W.P.Nos.15130 of 2015 etc Batch)? Petitioner's Arguments: The petitioner argued that the assessing authority did not follow the procedure of holding an enquiry with the other end dealer for the website mismatch, which is a mandatory requirement. Regarding the input tax credit, the petitioner relied on the precedent set in Bharath Traders, which held that the benefit of input tax credit should be extended to transactions with unregistered dealers retrospectively from the inception of the Act, not just from the date of amendment. Respondents' Arguments: The respondents argued that the writ petition was not maintainable because the petitioner had not availed the alternative remedy available to him.