The Madras High Court has quashed a reassessment order and remitted the matter back for fresh consideration in a case involving denial of Input Tax Credit (ITC) on zero-rated sales under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006.
The petitioner, Tvl. Fresh and Honest Cafe Limited, a registered dealer of coffee beans, seed, and vending machines, challenged the reassessment order dated 04.01.2022, which denied the benefit of G.O.Ms.No.36 and disallowed ITC on zero-rated sales.
An reassessment order dated 28.05.2015, was appealed by the petitioner. In 2016, the Appellate Commissioner had remitted the case back for reconsideration. However, the reassessment order once again denied the ITC. Thus, the petitioner filed the petition before the high court.
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The petitioner’s counsel, Mrs. Aparna Nandakumar referenced a recent Division Bench ruling in M/s. Consolidated Construction Consortium Limited vs. The Assistant Commissioner (CT), Mylapore, Chennai.
The department’s counsel argued that the petitioner has another option to appeal under Section 51 of the TNVAT Act, 2006, and so this Writ Petition should be dismissed. They also stated that even if the case is sent back, it should be under certain conditions.
It was further submitted that since the Division Bench’s decision in the mentioned case is under appeal in the Supreme Court, the issue is not yet settled.
Justice C. Saravanan, after considering the arguments, sent the case back to the respondent, quashing the Impugned Re-assessment Order, and instructed them to issue a fresh order within 8 weeks, based on the Division Bench’s decision and the facts of this case.
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The petitioner was asked to submit a detailed response, providing details of the Zero Rated Sales for which Input Tax Credit was claimed. Accordingly, the case was disposed of.
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