Tvl. Sri Vinayagar Steels Vs Assistant Commissioner (ST) (Madras High Court)
Madras High Court recently intervened in a tax dispute involving Tvl. Sri Vinayagar Steels and the Assistant Commissioner (ST) concerning an assessment order for the 2017-18 assessment year. The core of the case revolves around the petitioner’s claim of un-utilized Input Tax Credit (ITC) under the Tamil Nadu Value Added Tax (TNVAT) Act, 2006, which was not transitioned under the Goods and Services Tax (GST) regime due to the non-filing of a TRAN-1 application.
The petitioner had not responded to a show cause notice issued prior to the impugned assessment order. The court noted its consistent stance in similar cases, offering relief to assessees by quashing unfavorable orders, typically subject to a pre-deposit of a portion of the disputed tax.
Following this precedent, the Madras High Court quashed the assessment order against Tvl. Sri Vinayagar Steels. The case has been remitted back to the first respondent for a fresh adjudication on merits. This re-adjudication is conditional upon the petitioner depositing 25% of the disputed tax amount in cash as a pre-deposit.
The court has directed the petitioner to file a reply to the original show cause notice within 30 days of receiving the order, along with the required deposit. Subsequently, the first respondent is mandated to pass a fresh order within three months, ensuring the petitioner is granted a hearing. The order also stipulates that if the petitioner fails to comply with these conditions within the stipulated time, the writ petition will automatically stand dismissed, allowing the respondent to proceed as per law.
