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

Held

The Court held that the petitioner had an alternate and efficacious statutory remedy of appeal before the Tamil Nadu Sales Tax Appellate Tribunal under Section 58 of the TNVAT Act, 2006. The Court found that the writ petition was filed beyond the period prescribed for filing an appeal. While the petitioner argued that the first respondent passed a cryptic and non-speaking order, the Court examined the impugned order and found that the first respondent had framed specific points for consideration and provided findings on each. Specifically, Point No. 1 was answered in favour of the petitioner, and Points No. 2 and 3 were answered against the petitioner, upholding the reversal of ITC. The Court noted that the first respondent had given a reason for disallowing the ITC, stating that the petitioner did not produce documentary evidence to prove that the selling dealers' registration certificates were cancelled. The Court also distinguished the petitioner's 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 satisfy the Tamil Nadu Sales Tax Appellate Tribunal with sufficient cause for not filing the appeal within the extended period.

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. The petitioner's accounts for the years 2011-12 to 2015-16 were inspected by enforcement officials. Subsequently, the Assistant Commissioner (CT) issued a revision notice proposing to reverse Input Tax Credit (ITC) for purchases made from dealers whose TINs were cancelled. The petitioner objected, but the assessment order dated 27.12.2017 confirmed the proposal. An appeal to the first respondent (Appellate Deputy Commissioner) resulted in an order dated 03.04.2018, which partly allowed the appeal but disallowed the ITC claim on purchases from cancelled dealers. The petitioner argued that this order was passed mechanically, without application of mind, and in violation of natural justice and a circular dated 29.08.2007.

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, as contended by the petitioner? 2. Whether the petitioner has an effective alternative remedy of appeal before the Tamil Nadu Sales Tax Appellate Tribunal, and if so, whether this Court should entertain the writ petition? Petitioner's Arguments: The petitioner contended that the first respondent passed a cryptic, non-speaking order without due consideration to the documents and submissions made, and without applying its mind to the relevant circular of the Commissioner of Commercial Taxes. They argued that this constitutes a violation of natural justice. The petitioner also relied on judgments in Sujatha Jewellery Vs. Commercial Tax Officer and The Siements Engineering and Manufacturing Co. of India Ltd., Vs. the Union of India to support their claims regarding the requirement for reasoned orders and the application of mind. Revenue's Arguments: The respondents, represented by the Additional Government Pleader, did not explicitly record arguments in the judgment. However, the court noted that an appeal remedy was available to the petitioner.