VAT Turnover included in GST Assessment: Madras HC Remits Case for Fresh Consideration as Dealer Fails to Substantiate Replies [Read Order]

The petitioner, M/s Hind Aluminium Company, challenged two assessment orders dated February 2, 2025, and February 19, 2025, pertaining to assessment years 2017-18 and 2018-19, respectively.

The firm contended that the assessing authority erroneously included turnover liable to tax under the Tamil Nadu VAT Act, 2006, in the GST demand, particularly for the pre-GST period between April 1, 2017, and June 30, 2017.

It was further submitted that though replies were filed in response to DRC-01 notices, the authorities failed to consider them before confirming the demand.

The State argued that the petitioner had not furnished any supporting records or documents to substantiate its defense and that the orders were passed based on available records without procedural irregularity.

Also read: Hospitals’ Supply of Medicines and Implants to Indoor Patients Not aTaxable Sale: Gujarat HC Holds Charitable Hospitals Outside VAT Levy [ReadOrder]

The Court noted that the petitioner had indeed filed replies but failed to substantiate them, making it inappropriate for the High Court to engage in a fact-based inquiry under Article 226 of the Constitution.

Justice C. Saravanan remitted the matter to the assessing officer for fresh consideration, subject to pre-deposit conditions, 20% of the disputed tax for FY 2018-19 and 10% for FY 2017-18, after setting off any amounts already recovered.

The petitioner was permitted to file additional documents and a fresh reply within 30 days, and the assessing officer was directed to pass a speaking order within three months.

The Court clarified that failure to comply with these conditions would entitle the department to recover the dues as if the writ petitions were dismissed outright, ensuring both fairness and revenue protection.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates