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2016 (10) TMI 145 - MADRAS HIGH COURT

2016 (10) TMI 145 - MADRAS HIGH COURT - TMI - Opportunity of personal hearing - reversal of the process loss - reversal of the alleged stock transfer - validity of assessment - TNVAT Act, 2006 - jewellery of gold, silver and other special metal - inspection by Enforcement Wing in the premises of petitioner - Held that: - the decision in the case of M/s. Interfit Techno Products Ltd. Versus The Principal Secretary/Commissioner of Commercial Taxes, The Assistant Commissioner (CT) (FAC) [2015 (4) T .....

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. Thus, the assessment proceedings having been made in a very summary manner, the same calls for interference. - The impugned assessment orders made in a very summary manner without affording reasonable opportunity to the petitioner to put forth their submission and explain the nature of transactions - matters remanded to the respondent to re-do the assessment afresh after affording an opportunity of personal hearing, calling for further details, examining the books of accounts and records p .....

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uding the written instruction given by the respondent to the learned Additional Government Pleader vide letter dated 28.06.2016. 2. These writ petitions can be segregated into two groups viz., the first set of cases in WP.Nos.18847 to 18849 of 2016 which relate to the assessment years 2007-2008, 2008 to 2009-2010 under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act); and WP.Nos.18850 & 18851 of 2016 pertain to the assessment years 2011-2011 and 2011-2012 under the TNVA .....

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tion of principles of natural justice. To test as to the nature of relief that the petitioner would be entitled to, the following facts would be relevant. 3. The petitioner is a Private Limited Company incorporated under the Companies Act, 1956, engaged in the activity of manufacture and sales of articles of jewellery of gold, silver and other special metal and the said company is an assessee on the file of the respondent. On 04.11.2009 the officials of the Enforcement Wing conducted an inspecti .....

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in Tamil Nadu are used in manufacturing of of goods outside the State. Separate notice is issued on the same date i.e. on 15.04.2013 referring to Section 19(9)(iii) to reverse the input credit on the ground of process loss. On 16.10.2013, the petitioner submitted a reply to the notice dated 15.04.2013 with reference to process loss stating that the entire inputs are used in manufacturing jewellery. Alternatively it is stated that the respondent should not adopt an arbitrary ad hoc percentage of .....

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AT Audit was conducted and based on which, the respondent issued a notice on 25.10.2015, proposing to reverse the input tax credit on various issues and in respect of the demand under Section 19(4), it was lower than what was contemplated in the earlier notice dated 15.04.2013. Opportunity of personal hearing was afforded vide notice dated 06.11.2015. The petitioner submitted their reply and marked copies of reply dated 16.10.2013 and 02.12.2013 respectively and requested the personal hearing to .....

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oner, they have filed a bunch of documents on 28.04.2016 and on 03.05.2016 the impugned assessment orders have been passed. 3a. As pointed out earlier, there were two issues, one is regarding the reversal on the process loss and the other is, the reversal of the alleged stock transfer. On a perusal of the impugned orders, more particularly, in page 5 of the impugned order (no page numbers and no paragraph numbers given in the impugned order), it is seen that the assessment has been finalised all .....

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nt wanted to pursue the notices dated 15.04.2013, 06.11.2015, 21.12.2015 and according to the petitioner, the respondent did not pursue such notices. Thus, when such conflicting issues are involved, the authority ought to have directed the petitioner to appear in person and explain the transaction, especially, when they were called upon to furnish the documents and they have furnished the same on 28.04.2016 and immediately thereafter, an order has been passed, within a short span of time, especi .....

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ed by the petitioner on payment of VAT are used in the manufacture of jewellery. Alternatively, they stated that an ad hoc percentage of 8% should not be adopted. However, in these writ petitions, the petitioner has been able to give a working as to what according to them is the actual percentage of the manufacturing loss. This is in the form of tabular column in paragraph 6 at page 7 of the writ affidavit which shows that there is a varying percentage with manufacturing loss according to the pe .....

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