Rejection of Revision of Assessment request reveals VAT Order of 1.6cr has been passed in Undue Haste: Madras HC sets aside Order [Raed Order]

The Madras High Court set aside the VAT ( Value Added Tax ) assessment order, imposing a condition of 10% pre-deposit. The court's decision came as it noted that rejecting the revision request exposed the hasty nature of the VAT order issued by the officers.

The bench of Justice C. Saravanan observed that “...rejecting the request of the petitioner for revision of the assessment made on 28.09.2022 reveals that the order has been passed in undue haste. The dispute pertains to the Assessment Years 2014-2015 and 2015-2016 and the amount involved are huge. For the Assessment Year 2014-2015, the tax amount is Rs.91,46,490/- and the amount of tax involved for the Assessment Year 2015-2016 is Rs.68,98,819/-.”

The dispute revolves around the imposition of purchase tax under Section 12 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act). The record stated that since 2020, the petitioner has consistently received pre-revision notices, to which responses were duly provided. Subsequently, multiple opportunities were extended to the petitioner for a personal hearing.

However, despite the petitioner's letter dated September 21, 2022, requesting additional time to submit objections and supporting documents, and a subsequent communication on October 3, 2022, detailing imports from other states, the contested assessment orders were prematurely issued on September 28, 2022.

The petitioner P.C.S.Trades contended that following the letter dated September 21, 2022, regarding the Assessment Year 2014-2015, the Officer should have promptly communicated whether the request for adjournment was accepted or denied. Consequently, the petitioner argued that the second respondent was not justified in issuing the contested orders dated September 28, 2022, for the respective Assessment Years.

Furthermore, it was also argued that similar issues arising in the Assessment Year 2013-2014 were resolved favourably on October 31, 2022. However, for the Assessment Years 2014-2015 and 2015-2016, after the impugned orders were issued on September 28, 2022, the petitioner filed an application under Section 84 of the TNVAT Act. The application was dismissed by the second respondent on November 9, 2022, allegedly without due consideration of the petitioner's representations.

To balance the interest of the petitioner, the court decided to set aside the orders dated 09.11.2022 that rejected the petitioner's revision petition related to the orders dated 28.09.2022 on pre-deposit of 10% of the disputed tax.

Furthermore, the petitioner was directed to attend the personal hearing and to cooperate fully by providing necessary documents for a fair and lawful reassessment process. The second respondent is instructed to consider the assessment orders passed for the Assessment Years 2012-2013 and 2013-2014 on October 31, 2022, if relevant to the current case.

Mr. B.Rooban and Mr. J.K.Jayaselan Government Advocate appeared for the Petitioner and respondents respectively.

To Read the full text of the Order CLICK HERE

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