M/S. Sonas Essence Mart vs. The Appellate Deputy

Held

The Court held that the petitioner had an alternative and efficacious statutory remedy of appeal available under Section 58 of the TNVAT Act, 2006, before the Tamil Nadu Sales Tax Appellate Tribunal. The Court noted that the writ petition was filed beyond the prescribed period for filing an appeal. While the petitioner argued that the appellate order was cryptic and passed without application of mind, the Court found that the first respondent had considered the assessment order and partly allowed the appeal, indicating application of mind. The Court also observed that the first respondent had provided reasoning for disallowing the ITC claim, stating the petitioner's failure to produce documentary evidence regarding the cancellation of selling dealers' registration certificates. The Court distinguished the cited judgments, finding them not applicable to the facts of the case. Therefore, the Court concluded that the first respondent had neither violated the principles of natural justice nor passed the order without application of mind. The Court left it open for the petitioner to approach the Tribunal and satisfy it with sufficient cause for the delay in filing the appeal, as per the proviso to Section 58(1)(b) of the TNVAT Act. The writ petition was dismissed.

Facts

The petitioner, M/s. Sonas Essence Mart, a registered dealer under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006, filed a writ petition challenging an order dated 03.04.2018 passed by the Appellate Deputy Commissioner (CT)(FAC), Trichy. This order partly allowed the petitioner's appeal against a revised assessment order dated 27.12.2017 passed by the Assistant Commissioner (CT). The revision notice, dated 24.07.2017, proposed reversing Input Tax Credit (ITC) for purchases made from dealers whose TINs were cancelled. The petitioner contended that they provided all necessary invoices and documents under Section 19 of the TNVAT Act and that the appellate order was passed mechanically, without application of mind, and in violation of natural justice and a circular dated 29.08.2007. The petitioner also alleged malafide intention and blatant violations of principles of natural justice.

Key Issues

1. Whether the impugned order dated 03.04.2018 passed by the first respondent violates the principles of natural justice and was passed without application of mind, thereby warranting interference under Article 226 of the Constitution of India, particularly concerning the reversal of ITC for purchases made from cancelled dealers? 2. Whether the petitioner has an effective alternative remedy under Section 58 of the TNVAT Act, 2006, against the order of the first respondent? Petitioner's Arguments: The petitioner argued that the first respondent passed a cryptic, non-speaking order without due consideration to documents and submissions, and without applying its mind to the circular of the Commissioner of Commercial Taxes dated 29.08.2007, thus violating principles of natural justice. They relied on judgments like Sujatha Jewellery and Siemens Engineering and Manufacturing Co. of India Ltd. to support the need for reasoned orders and opportunity to file appeals. Revenue's Arguments: The respondents contended that an appeal remedy was available to the petitioner under Section 58 of the TNVAT Act. They also argued that the first respondent had applied its mind, partly allowed the appeal, and provided reasoning for disallowing the ITC claim, specifically stating that the petitioner did not produce documentary evidence to prove the cancellation of selling dealers' registration certificates.