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Sri Lakshmi Textiles Versus The Commissioner of Commercial Taxes And Others

2016 (1) TMI 329 - MADRAS HIGH COURT

Reversal of Input Tax credit - levy of penalty under Section 27(3) of the TNVAT Act - Held that:- At the time of purchasing the goods, admittedly, the petitioner has paid the tax to the seller, which is not under dispute. The reason assigned in the impugned order is that the petitioner firm is denied Input Tax Credit just because the dealer/seller has failed to report the same before the respondents. The reason adduced by the respondent is unacceptable for the reason that when admittedly the pet .....

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proceedings of the second respondent in TIN/33915681560/2013-14, dated 10.08.2015 and quash the same. 2. The case of the petitioner is that the petitioner firm is a partnership concern carrying on business in the name and style of 'Sri Lakshmi Textiles' dealing in inner garments and textiles. The said concern is registered under the second respondent which is regularly paying monthly returns under the Tamil Nadu Value Added Tax Act and the petitioner promptly adjusted the legitimate tax .....

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of the Tamil Nadu Value Added Tax Act. 3. While the situations stood thus, the second respondent has issued a notice dated 28.07.2015 alleging that on verification of the department website, some of the other end dealers had not paid tax to the tune of ₹ 10,317/- and proposed to reverse the said Input Tax Credit and also to levy penalty under Section 27(3) of the TNVAT Act. The entire purchases were duly accounted for in the books of accounts. No material defect or wrong availment of Inpu .....

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irming his proposal vide notice dated 28.07.2015. Though valid objections have been filed by way of explanation, the respondent has simply rejected the same by passing the impugned order. Further, the second respondent himself has admitted that the claim of Input Tax Credit is covered by valid tax invoices as required under Rule 10(2) of the Tamil Nadu Value Added Tax Rules and when it is so, he cannot compel the petitioner to produce annexure II of the other end dealer which can be easily verif .....

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In all the cases cited supra, an identical prayer sought for by the petitioner in this Writ Petition has been entertained and the same has also been allowed by this Court. If at all there is non-payment of tax collected by the other end dealer, the petitioner cannot be made liable for the same. Hence, the impugned order is liable to be set aside. 6. The learned Government Advocate submitted that though the petitioner firm has properly reported the sales turnover in annexure-I and bill copies, ho .....

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rused the materials available on record. 8. A perusal of the records would show that at the time of purchasing the goods, admittedly, the petitioner has paid the tax to the seller, which is not under dispute. The reason assigned in the impugned order is that the petitioner firm is denied Input Tax Credit just because the dealer/seller has failed to report the same before the respondents. The reason adduced by the respondent is unacceptable for the reason that when admittedly the petitioner firm .....

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