Tvl. Roopa Enterprises vs. The Assistant Commissioner(CT)

Held

The Court held that the assessment order dated 09.05.2016 was liable to be set aside due to a violation of the principles of natural justice. Specifically, the Court noted that no opportunity for a personal hearing had been afforded to the petitioner, which is mandatory according to departmental circulars and guidelines. While the petitioner claimed to have produced primary data to establish the genuineness of transactions, the respondent contended that only partial particulars were submitted, not all those required under Rule 10(2) of the Tamil Nadu Value Added Tax Rules, 2007. The Court found it necessary for the assessment to be re-done in accordance with law, particularly in line with the prescriptions in Rule 10(2). The impugned assessment was therefore set aside. The Court directed the petitioner to appear before the Authority on 13.08.2019, treating the notice dated 16.06.2015 as a show cause notice. The respondent was ordered to supply the details sought by the petitioner and permit the filing of an additional submission. Subsequently, an order of assessment de novo was to be passed within four weeks from the date of the personal hearing, i.e., on or before 16.09.2019.

Facts

The petitioner, Tvl.Roopa Enterprises, challenged an order dated 09.05.2016 passed by the Assistant Commissioner (CT), Madurai, under the Tamil Nadu Value Added Tax Act, 2006. The order proposed reversal of Input Tax Credit (ITC) on purchases from Tvl.Sri Sales Corporation, citing the latter's failure to file monthly returns and cancellation of its registration effective 03.09.2009. The petitioner had sought details regarding the cancellation and an opportunity to cross-examine the dealer, asserting it had provided purchase bills, ledger copies, and bank statements to prove the genuineness of transactions. The respondent, however, contended that only partial particulars were produced, not all those necessary to comply with Rule 10(2) of the Tamil Nadu Value Added Tax Rules, 2007.

Key Issues

1. Whether the impugned assessment order dated 09.05.2016, which proposed reversal of Input Tax Credit (ITC), is liable to be quashed on the grounds of violation of principles of natural justice and being contrary to established judgments. (Question of law) Petitioner's arguments: The petitioner argued that the assessment order was illegal and against the principles of natural justice. It contended that it had provided sufficient documentation, including purchase bills, ledger copies, and bank statements, to establish the genuineness of its transactions. The petitioner also sought an opportunity to cross-examine the dealer and relied on previous judgments of the High Court reported in (2012) 50 VST 179, (2013) 59 VST 256, and (2013) 60 VST 283. Furthermore, the petitioner highlighted that no personal hearing was afforded, which is mandatory as per departmental circulars. Revenue's arguments: The respondent contended that the petitioner had not produced all the necessary particulars to establish compliance with Rule 10(2) of the Tamil Nadu Value Added Tax Rules, 2007, despite the petitioner's assertion of having submitted primary data.