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M/s. Kothari Industrial Supplies, Rep., by its Proprietor, Pankaj Kothari Chennai Versus The Commercial Tax Officer, Assessment Circle, Chennai

2016 (7) TMI 1159 - MADRAS HIGH COURT

Reversal of input tax credit (ITC) - local purchases from registration cancelled dealers - Held that:- the exercise of jurisdiction of the Assessing Officer is ex-facie arbitrary and illegal. - Decided in favor of assessee. - W.P.Nos.24265 & 24266 of 2016 - Dated:- 14-7-2016 - Mr. JUSTICE T.S.SIVAGNANAM For the Petitioner : Mr.R.Kumar For the Respondent : Mr.S.Kanmani Annamalai AGP COMMON ORDER Heard Mr.R.Kumar, learned counsel for the petitioner, Mr.S.Kanmani Annamalai, learned Additional Gover .....

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evealed that the petitioner has effected local purchases from registration cancelled dealers and accordingly, the respondent proposed to reverse the ITC claimed by the petitioner. In fact, these notices dated 27.10.2015, were issued to the petitioner after the earlier Writ Petitions filed by the petitioner challenging the assessment orders in W.P.Nos.11147 & 11148 of 2015, were allowed by order dated 09.06.2015, and the matter remanded to the respondent for fresh consideration. The petitione .....

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he decisions squarely apply to the petitioner's case. 3. The respondent while acknowledging the receipt of the objections brushed aside the contention raised only on the ground that the petitioner is not a party in those cases and he cannot rely upon the judgment. At the out set, it has to be pointed out that the observations made by the respondent as regards the effect of the decisions of this Court is wholly erroneous. The petitioner relied upon those decisions in support of the legal cont .....

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(Mad) and (ii) SRI VINAYAGA AGENCIES v. ASSISTANT COMMISSIONER (CT), VADAPALANI-I ASSESSMENT CIRCLE, CHENNAI AND ANOTHER [(2013) 60 VST 283 (Mad)]. 5.In the case of ALTHAF SHOES (P) LTD., cited supra, the petitioner was a dealer and exporter of finished leather and other products, who claimed refund of ITC under Section 18 (2) of the VAT Act in respect of the exports made. Though the refund was granted, subsequently notice was issued seeking to withdraw the relief on the ground that its dealer h .....

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istered dealers on the files of the Revenue and the assessee had also given the TIN number of these vendors. When such particulars are available, it is for the Revenue to take necessary action against the vendors, who had not remitted tax collected by them to the State. Without taking recourse to that, the Revenue could not deny the claim of the assessee. Going by Rule10(2) of TN Vat Rules read along with section 19(1) of the TN Vat Act, it is clear that so long as the purchasing dealer has comp .....

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there is nothing repugnant in the said circular issued by the Commissioner as a head of the Department as regards the provisions of the Act on input-tax credit claim. Holding so, allowed the writ petition and in the case of Sri Vinayaga Agencies vs. Assistant Commissioner (CT), Vadapalani-1, Assessment Circle, Chennai reported in (2013) 60 VST 283 (Mad), the petitioner was dealer in lubricants, purchasing lubricants from a registered dealer. On inspection, it was found that the vendor / dealer h .....

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wrongly availed of input tax credit wrongly. Section 19 (1) states that input-tax credit can be claimed by a registered dealer, if he establishes that the tax due on such purchase has been paid by him in the manner prescribed and that was accepted at the time when the self-assessment was made. The pre-revision notices and the orders clearly stated that the petitioner-dealer had paid the tax to the selling dealer. If that be the case, it was held that the petitioner's case therein squarely fe .....

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