Case Law Details
Tvl. Sharmi Traders Vs Assistant Commissioner (Madras High Court)
ntroduction: The Madras High Court’s recent decision in Tvl. Sharmi Traders vs. Assistant Commissioner highlights the court’s intervention, quashing an order passed without due consideration of the petitioner’s response. The case involves alleged contravention of Section 16(2)(b) of the Tamil Nadu Goods and Services Tax Act, 2017.
Detailed Analysis:
1. Background: Sharmi Traders, engaged in the business of dealing in copper waste and scrap, faced allegations of violating tax regulations. The court documents reveal that the petitioner responded to notices, citing that Input Tax Credit (ITC) was rightfully availed. The petitioner submitted relevant ledger accounts, tax invoices, and E-way bills as evidence.
2. Impugned Order: Despite the petitioner’s submissions, the impugned order rejected the explanation provided. The court observed that the documents presented were not considered by the Assessing Officer. The rejection was based on the absence of valid supportive documents for the physical movement of goods.
3. Court Intervention: The court, upon examining the impugned order, found that it lacked a discussion on the documents submitted by the petitioner. Notably, invoices and E-way bills containing details of purchases and movement of goods were not considered. The court emphasized that the order overlooked legitimate evidence supporting the petitioner’s claims.
4. Quashing the Order: In light of the oversight in the assessment order, the Madras High Court quashed the orders dated 03.07.2023. The court directed a reconsideration of the matter, underscoring the importance of providing a reasonable opportunity to the petitioner.
Conclusion: The Madras High Court’s decision in Tvl. Sharmi Traders vs. Assistant Commissioner serves as a reminder of the judiciary’s role in ensuring fair assessments. Quashing the order due to an inadequate consideration of the petitioner’s reply emphasizes the need for a thorough examination of relevant documents and a fair opportunity for the party involved.
This detailed analysis sheds light on the Madras High Court’s intervention in the Tvl. Sharmi Traders case, offering insights into the court’s decision to quash an order that overlooked the petitioner’s response. Understanding the nuances of such legal proceedings is crucial in navigating tax-related issues.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In these two writ petitions, two separate impugned orders dated 03.07.2023 relating to the financial years 2020-21 and 2021-22 are assailed.
2. The petitioner asserts that he is engaged in the business of dealing in copper waste and scrap of primary cells, primary batteries and electric accumulators. Pursuant to an inspection carried out at the premises, the petitioner was put on notice of alleged contravention of Section 16(2)(b) of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). The petitioner responded to the notices issued in Form GST DRC-01A and Form GST DRC-01 and stated that ITC was not wrongly availed. In support of such contention, the petitioner placed on record the relevant ledger accounts, tax invoices and E-way bills. Eventually, by the orders impugned herein, the explanation provided by the petitioner was rejected. These writ petitions were filed in the above facts and circumstances.
3. Learned counsel for the petitioner invited my attention to the impugned order and submitted that the documents filed by the petitioner to corroborate that the input goods were duly purchased and delivered to the petitioner were not taken into account by the Assessing In particular, he referred to the conclusion recorded at page 181, internal page 10 of the order.
4. Mr. TNC. Kaushik, learned Additional Government Pleader (Taxes), accepts notice on behalf of the respondents. He points out that a statutory appeal was available in respect of the impugned order. He also points out that the ITC claim was rejected for non submission of documents.
5. On examining the impugned order in respect of Issue No.1 relating to wrong availment and utilization of ITC, the following was recorded in respect of thereof in the operative portion of the order:
“Issue No.1 – Wrongly availed and utilized input tax credit:-
The tax payer raised his objections against this discrepancy noticed by stating that they had stated that they had actually purchased the goods from their suppliers and to drop the proposals. They have not submitted any records related to the movement of goods from the supplier’s place to their business premises, mode of transport and records related to the physical movement of goods.
In the absence of valid supportive documents for the physical movement of goods the objections and records submitted is not supportive to their objections and hence the proposals for the levy of tax, penalty and interest are found to be in order and hence the proposals are confirmed.”
6. The above extract contains the findings that the petitioner did not submit any documents relating to movement of goods, mode of transport and physical movement of goods, and that the proposal for levy of tax, penalty and interest is found to be in order as a consequence.
7. The petitioner has placed on record invoices and E-way bills relating to the relevant purchases. The E-way bills contain details of not only the products purchased by the petitioner but also the vehicles used for the movement of goods. The impugned order does not contain any discussion on the documents produced by the petitioner to corroborate the assertion that legitimate purchases were made and point out deficiencies or On that ground, the impugned order calls for interference. Therefore, the impugned orders dated 03.07.2023 are quashed. As a corollary, these matters are remanded for re-consideration. The second respondent is directed to re-consider the matter and issue a fresh assessment order after providing a reasonable opportunity to the petitioner.
8. W.P.Nos.677 and 679 of 2024 are disposed of on the above terms. No costs. Consequently, W.M.P.Nos.708, 704, 705, 707 of 2024 is closed.
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