Krthika Agencies vs The Assistant Commissioner (CT) (FAC)

T.S. Sivagnanam, J.—By consent of the learned counsel on either side, these writ petitions are taken up for final disposal.

The petitioners in both these writ petitions are registered dealers under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (in short ''the TNVAT Act, 2006) and the challenge in these writ petitions is as to the orders of assessment dated 04.01.2013, passed by the respondent. Since the facts in issue are identical, both these writ petitions are clubbed together, heard and disposed of by this common order.

The petitioners were issued revision notice stating that on scrutiny of the returns, it revealed that they failed to furnished the details of input/purchase details in Annexure I for the year 2010-2011 and therefore, the respondent proposed to treat the entire purchases as unregistered dealers under Section 12, which attracts tax at 4%. The respondent further referred to Section 12(a) and stated that when the goods are liable to tax, but not paid tax and the dealer consumes or uses such goods in or for the manufacture of other goods for sale or otherwise is liable to pay tax under the said provision. Therefore, it was proposed to levy tax at 4% and the petitioners were directed to submit their objections to the notice, proposing to levy tax at 4%.

The petitioners also submitted their objections, stating that though the petitioners have purchased products from unregistered dealers, the products so procured have been used only for the purpose of a trading activity and not in the process of manufacturing activities. However, to establish this fact, there appears no documents were produced before the respondent.

The respondent, on receipt of the objections, considered the same and rejected the contentions stating that the sources of purchases have not been mentioned by the petitioners in Annexure-I of Form-I under the TNVAT Act, 2006 and the petitioners have also not shown in the front page of Form-I of value added monthly return for the relevant assessment year. Therefore, the proposal in the notice was confirmed and tax was levied. Challenging the same, present writ petitions have been filed.

A counter affidavit has been filed by the respondent, resisting the claim made by the petitioners both on facts and on law, by raising primary objections stating that writ petitions are not maintainable, as the petitioners have the remedy of appeal under the provisions of the Act. In this regard, reliance has been placed on a decision of the Hon''ble Supreme Court in the case of Union of India (UOI) and Others Vs. Tata Engineering and Locomotive Co. Ltd., .

Heard the learned counsel on either side and perused the material documents placed on record.

The case of the petitioners is that though they purchased products from unregistered dealers, the products so procured have been used only for the purpose of a trading activity and not in the process of manufacturing activities. If that be the case, nothing prevented the dealers from disclosing the details of purchase and receipts in annexure-I of Form-I to the respondent. Admittedly, annexure-I of Form-I has been left blank without furnishing any details. The petitioners could have produced the relevant details even along with the reply. Except for mentioning names of certain organizations, who are the clients of the petitioners, no other details were produced. Hence, this Court is of the view that there is a factual dispute as to whether the petitioners have used the goods purchased from unregistered dealers only for a trading activity and not in the process of manufacturing activities.

According to the learned counsel for the petitioners, the products have not been used for manufacturing activities by the petitioners. Therefore, in my view, onus cannot be shifted on the department, since at the first instance onus rests on the petitioners to furnish details in annexure-I and the claim of the petitioners under the Act is the self assessment procedure. Therefore, when serious disputed questions are involved in these writ petitions, it is a fit case where the petitioners should not be permitted to bypass the statutory remedy of filing appeal and the writ petitions cannot be entertained at this stage, since the issue involved is not with regard to the applicability of Section 12(a) of the Act, but mixed question of both facts and law. Unless facts are established then, then alone it could be examined as to whether Section 12 of the Act would stand established. Therefore, this Court is not inclined to entertain these writ petitions, quashing the orders of assessment.

Accordingly, for the reasons stated supra, the writ petitions are held to be not maintainable and the same are dismissed. However, liberty is granted to the petitioners to prefer an appeal to the appellate authority and if any such appeal is preferred, within a period of 30 days from the date of receipt of a copy of this order, the appellate authority shall consider the same without reference to the limitation and proceed further in accordance with law. No costs. Consequently, connected miscellaneous petitions are closed.

Registry is directed to return the original impugned orders to the petitioners after retaining the Photostat copies.