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Metalica Metals, Mr. Kailash Bhandari Versus The Commissioner of Commercial Taxes Department, The Commercial Tax Officer

2016 (10) TMI 855 - MADRAS HIGH COURT

Reversal of input tax credit - non production of documents under Section 19(13) of the TNVAT Act - Held that: - the second respondent erroneously reversed the input tax credit on the ground of lack of clarity in the documents produced. If the second respondent was satisfied with the very same documents while considering the issue of cross-verification, this Court is at a loss to understand as to how they would not be relevant for consideration while deciding the issue of reversal of credit. - .....

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s contention is not acceptable. This finding lacks clarity - If the second respondent was of the view that there was lack of clarity, nothing prevented the second respondent from calling upon the dealer to appear in person and clarify the issues arising out of the documents, which they had submitted. In such circumstances, this Court is satisfied that the manner, in which, the impugned assessment orders have been passed, is not sustainable in law. - Writ petitions disposed off - finding give .....

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d both. By consent, the writ petitions are taken up for joint disposal. 2. The petitioner is a registered dealer on the file of the second respondent under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (hereinafter called the TNVAT Act) and the Central Sales Tax Act, 1956, in ferrous and non ferrous metals and mainly in stainless steel. In these writ petitions, the petitioner has challenged the orders of assessment under the TNVAT Act for the assessment years from 2007-08 to 2014-15 .....

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Section 19(13) of the TNVAT Act and (iii) cross verification. 4. As regards the first issue, the petitioner admitted the proposal and paid the tax due and hence, there is no quarrel or dispute on the said issue. 5. Similarly, with regard to the third issue, the petitioner, while submitting their objections to the pre-revision notices, furnished details of the other end dealers, who had filed returns and paid taxes and found the information to be correct and the second respondent was satisfied t .....

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ransaction and that their contention of local arrangement on the transportation was not acceptable while comparing with their purchase volume. It was further stated in the pre-revision notices that the concerned purchases were subject to verification of genuineness and that in the absence of clarity, it was proposed to reverse the input tax credit on the concerned purchase, the details of which were mentioned in the pre-revision notices. 8. The petitioner, vide objections dated 22.1.2016, which .....

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t the principles of natural justice and fair play. Without prejudice to such a contention, the petitioner requested the second respondent to furnish the details of purchases such as bill numbers, date, name, month, on which, the claim of input tax credit is sought to be reversed to enable them to reconcile and get clarification and confirmation from their sellers. 9. With regard to the proposal to reverse the claim of input tax credit on the purchase turnover, based on the alleged cross verifica .....

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n that the petitioner had effected purchases from registration cancelled dealers, it was submitted by the petitioner that they effected purchases from various registered dealers and the same are covered by original tax invoices and they were duly reflected in their account. Further, for the sales made, the sellers had charged VAT as applicable in their sale bills and the same were paid to the petitioner through bank and based on these purchases, they are entitled to claim input tax credit in ter .....

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s, the second respondent furnished the details. With regard to the movement of goods, the petitioner had furnished documents along with their common reply dated 25.3.2016. The stand that the petitioner effected purchases from registration cancelled dealers was denied and supportive documents were placed for consideration before the second respondent. 13. While completing the assessments and passing the impugned orders, the second respondent stated that the contention of the petitioner is not acc .....

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ing the materials on record, it is to be pointed that the manner, in which, the second respondent has completed the assessment under the said head is unsustainable. It is an admitted fact that the petitioner requested for details and certain details were furnished by the second respondent, for which, the petitioner submitted their objections. In fact, while deciding the third issue regarding cross verification, the returns filed by the vendors were verified and the second respondent was satisfie .....

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ile deciding issue No.2. 16. In so far as the issue pertaining to purchases effected from registration cancelled dealers is concerned, it is pointed out that all those cancellations were with retrospective effect and on the effective date, they were registered dealers. It is further brought to the notice of this Court that some of the dealers, whose registration was cancelled, approached this Court and those orders were set aside and the registration certificates were restored. The second respon .....

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uch benefit. Therefore, the assessment orders granting input tax credit were validly passed. There was no cancellation of the registration certificates of the selling dealers at that point of time. The retrospective cancellation of the registration certificates issued to the selling dealers could not affect the right of the petitioners, who had paid the tax on the basis of the invoices and thereafter claimed the benefit under Section 19 of the Tamil Nadu Value Added Tax Act, 2006. Therefore, the .....

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