2019 (8) TMI 1886 - HC - VAT and Sales Tax

Reversal of ITC - petitioners had effected inter-state sale of goods without C Form Declarations - second revision notice - first revision notice already dropped - HELD THAT - Having dropped the first proposal there is clearly no justification for issuance of the second revision notice wherein the respondent has simply sought wide ranging particulars from the petitioners. It appears that what the Assessing Authority has embanked in the second revision upon a fishing expedition. No flaw or lacunae in the turnover returned by the assessee has been pointed out in the second revision notice in the absence of which the notice has no justification at all. Petition allowed.

Summary

Issues:
Assessment orders under the Tamil Nadu Value Added Tax Act, 2006 for the periods 2011-12, 2012-13, and 2011-12 challenged by the petitioners.

Analysis:
The petitioners, who are timber dealers, received pre-assessment notices proposing the reversal of Input Tax Credit (ITC) due to alleged interstate sales without 'C' Form Declarations. The petitioners responded, explaining that their purchases were imported and sold interstate with 2% CST remitted. The authorities accepted this explanation and dropped the proposal for ITC reversal in January 2016.

Subsequently, new notices were issued in February 2016, requesting additional details like opening balance, purchase effects, and closing stock. The court noted that after the initial proposal was dropped, there was no justification for the new notice seeking extensive particulars from the petitioners. The court criticized this as a fishing expedition by the Assessing Authority, as no errors in the turnover reported by the petitioners were identified in the new notice.

Consequently, the court found that the second revision notice lacked justification and was unwarranted. As a result, the court allowed the writ petitions, with no costs imposed on the petitioners. The connected Miscellaneous Petitions were also closed in light of this decision.