Sree Baba Fabrics vs. The Assitant Commissioner(St)

Held

The Court held that the pre-revision notices issued by the respondent were indeed bereft of essential particulars. Specifically, the notices failed to provide details of the dealer at the other end, such as their name or TIN, and the web report used for cross-verification was not enclosed. The Court emphasized that for mismatches, Circular No. 10 of 2015 mandates the enclosure of invoice-wise data of mismatches, either in print, CD, or email. Furthermore, the Court referred to the decision in JKM Graphics Solutions Pvt., Ltd. v. Commercial Tax Officer, which outlines a procedure for assessing officers in cases of mismatch. This procedure requires the assessing officer to first conduct an enquiry at the departmental level, including consulting with the assessing officer of the other end dealer, to ascertain the cause of the mismatch. Only after satisfying themselves that a revision is warranted should a show-cause notice with full particulars be issued. The Court found that these procedures and circulars were not scrupulously followed by the assessing officer in the present case. Consequently, the impugned orders were set aside, and the matter was remanded for fresh consideration. The respondent was directed to conduct a thorough enquiry, consult with other assessing officers, issue a show-cause notice with all particulars as per the circular and the cited judgment, afford a personal hearing, and then pass appropriate orders within eight weeks.

Facts

The petitioner, Sree Baba Fabrics, a dealer in fabrics and garments, filed writ petitions challenging revised assessment orders dated March 23, 2018, passed by the Assistant Commissioner (ST), Karur (West) Circle. These orders reversed the Input Tax Credit (ITC) for the assessment years 2011-12 to 2014-15. The petitioner had filed returns on time, which were deemed assessed under Section 22(2) of the TNVAT Act. However, an inspection and scrutiny of web reports revealed a mismatch between Annexure I and Annexure II of seller and buyer end returns. The respondent issued pre-revision notices on January 25, 2018, but these notices allegedly lacked the necessary particulars and supporting web reports. Despite the petitioner's detailed representation on February 9, 2018, the respondent passed the impugned orders without a proper hearing.

Key Issues

1. Whether the pre-revision notices issued by the respondent were vitiated for lack of essential particulars, specifically the web report and details of the other party to the transaction, thereby violating the principles of natural justice and the guidelines laid down in Circular No. 10 of 2015 and the High Court's decision in JKM Graphics Solutions Pvt., Ltd. v. Commercial Tax Officer? Petitioner's arguments: The petitioner contended that the pre-revision notices were bereft of requisite particulars, including the web report and details of the counter-party dealer, making it impossible to reconcile the alleged mismatch. They relied on the decision in JKM Graphics Solutions Pvt., Ltd. v. Commercial Tax Officer, which mandates the inclusion of such particulars and a thorough departmental enquiry before issuing a show-cause notice. They argued that their detailed representation was not properly considered, and they were denied a personal hearing. Respondent's arguments: The respondent argued that show cause notices were issued on January 25, 2018, to which the petitioner responded with an objection cum representation dated February 12, 2018. After considering the response, the respondent proceeded to pass the impugned orders. Therefore, they prayed for the dismissal of the writ petitions.