In a recent ruling, the Madras High Court set aside the VAT ( Value Added Tax ) order issued after 9 years post Show Cause Notice ( SCN ) issued in the year 2015. The matter was remanded for reconsideration.
The bench of Justice Senthilkumar Ramamoorthy osberved that “The documents on record indicate that no hearings or other developments took place between 2015 and 11.03.2024. Solely on this ground, re-consideration is necessary by providing a reasonable opportunity to the petitioner.”
A VAT order under Tamil Nadu VAT Act, 2006 was challenged by the assessee, M.R. Constructions before the High Court. The assessee received an SCN dated 12.12.2023 under Section 27 of the TNVAT Act. Such show cause notice was replied to. This was followed by another show cause notice issued in 2015. The assessee replied thereto on 23.06.2015.
The assessee further submitted that there were no developments thereafter until the impugned VAT assessment order was issued on 11.03.2024.
The counsel for the petitioner, Ms.S.P.Sri Harini submitted that the VAT proposal pertains to the availment of Input Tax Credit by the petitioner. She further stated that the petitioner had responded to the show cause notice and believed that the proceedings had been dropped. However, after approximately nine years, the impugned order was unexpectedly issued.
In view of the lapse of a considerable period of time, the respondents’ representative, Mr.V.Prasanth Kiran, Government Advocate submitted that the matter may be remanded for reconsideration.
After nine years of no developments, the High Court decided to set aside the VAT assessment order and remand the matter for reconsideration. The assessee was instructed to submit an additional reply to the show cause notice within 15 days. Subsequently, the respondent was directed to provide a personal hearing and issue a fresh assessment order within three months.
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