M/S Infiniti Retail LTD. vs. The State Of Telangana

Held

The Court held that the impugned assessment order was factually incorrect regarding the submission of trading account details. The Court also noted the petitioner's willingness to produce original invoices for input tax credit claims for the specified periods. Given these circumstances, the Court set aside the impugned order. The matter was remitted back to the 3rd respondent to consider the trading account particulars already submitted and the original invoices that the petitioner is to produce within four weeks. The 3rd respondent is then to pass a reasoned order in accordance with the law. The ratio decidendi is that assessment orders must be based on accurate factual findings and provide an opportunity for the assessee to submit all relevant evidence, especially when the assessee demonstrates willingness to comply. The Court did not expressly leave any issue undecided.

Facts

The petitioner assails an Assessment Order passed by the 3rd respondent on August 31, 2019, under the Telangana VAT Act, 2005. The petitioner's primary contention is that trading account details were submitted on August 29, 2019, which was acknowledged by the 2nd respondent's office. However, the impugned order incorrectly stated these details were not submitted. The petitioner also faced an issue regarding the non-submission of documentary evidence for input tax credit claims for April, June, August 2014, January, and March 2015. The petitioner stated that this evidence was submitted, but the 3rd respondent objected to the non-production of original invoices.

Key Issues

1. Whether the 3rd respondent erred in recording that the petitioner did not submit its trading account details, contrary to the petitioner's submission on August 29, 2019, thereby violating principles of natural justice? (Issue of mixed law and fact, concerning the recording of facts and procedural fairness). 2. Whether the 3rd respondent was justified in disallowing input tax credit for specific periods (April, June, August 2014, January, March 2015) solely on the ground of non-production of original invoices, when the petitioner claims to have submitted documentary evidence and is now willing to produce the originals? (Issue of mixed law and fact, concerning the evidentiary requirements for input tax credit claims). Petitioner's Contentions: - The trading account details were indeed submitted on August 29, 2019, and the 3rd respondent's finding to the contrary is factually incorrect. - The documentary evidence for input tax credit was also submitted, and the petitioner is prepared to produce the original invoices. Revenue/State's Contentions: - The learned Government Pleader for Commercial Taxes did not dispute the petitioner's submission that trading account details were provided on August 29, 2019.