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2021 (2) TMI 511 - HC - VAT and Sales TaxRaising unpaid tax demands - recovery of short paid tax - levy of penalty in terms of Section 75A of the TVAT Act - assessment period 2010-11, 2011-12 and 2012-13 - HELD THAT:- There is a clear misconception on part of the Assessing Officer as to his powers under sub-section (1) of Section 25 of the TVAT Act. Clause (a) of sub-section (1) of Section 25 can be activated when a dealer has not paid the tax at prescribed rate without sufficient cause which tax liability emerges from the return filed by him. If there is any legal dispute about the declaration of the taxable turnover or any other element of any of the claims made by the assessee in the return, the same cannot be a subject matter of a demand by the Assessing Officer under Clause (a) of sub-section (1) of Section 25 of the TVAT Act. Any dispute as to correct taxable turnover, any claim of exemption or deduction or any other disputed item under the return filed by a registered dealer, has to be first adjudicated by the Assessing Officer in the assessment proceedings. Clause (a) of sub-section (1) of Section 25 cannot be termed into an assessment which in the present case the Assessing Officer has done. According to him, the petitioner could not have excluded the discounts passed on to the dealers from his taxable turnover and to that extent the assessee had declared turnover less than the actual turnover. Even if the Assessing Officer is correct in so contending, it is not under Section 25(1)(a) of the Act that he can bring such turnover to tax. Allowing him to do so, would not only be expanding the boundaries of the powers under sub-section (1) of Section 25 of the TNVAT Act but also overriding the limitation provisions contained in the said chapter. The impugned orders of tax demands raised by the Assessing Officer under Section 25 of the TVAT Act are set aside - attachment or attachments on the petitioner’s bank accounts are lifted - Petition allowed.
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