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Judgment
R. Sudhakar, J.—The writ petition has been filed primarily challenging that portion of the notice calling upon the petitioner to pay the
differential value added tax within seven days of receipt of the notice, failing which recovery proceedings would be taken as per law. Even as per
the notice, tax reported to be paid is at 5% and what is actually due is 14.5% for the six months in issue. Section 25 of the Tamil Nadu Value
Added Tax Act, 2006 reads as follows:-
Procedure to be followed in assessment of certain cases.--(1) If no return is submitted by the dealer u/s 21 within the prescribed period, or if
the return submitted by him appears to the assessing authority to be incomplete or incorrect, the assessing authority may, after making such enquiry
as it considers necessary, determine the tax payable by the dealer to the best of its judgment.
Provided that, before taking action under this sub-section on the ground that the return submitted by the dealer is incomplete or incorrect, the
dealer shall be given a reasonable opportunity of proving the correctness or completeness of the return submitted by him.
(2) If the assessing authority has reason to believe that the tax determined by it for any period was based on too low a turnover or was made at
too low a rate or was based on too high a turnover or was made at too high a rate it may enhance or reduce, as the case may be, such
determination of tax:
Provided that before making an enhancement of the tax payable as aforesaid, the assessing authority shall, give a reasonable opportunity to the
dealer to show cause against such enhancement and make such enquiry as it may consider necessary.
(3) The determination and collection of tax under this Section shall be subject to such adjustment as may be prescribed on the completion of final
assessment in the manner prescribed.
In such view of the matter, accepting the petitioner''s contention and overruling the stand taken by the respondent that the respondent is entitled to
issue notice together with demand, in view of the proviso to Section 25(2), the Court is inclined to set aside that portion of the order which makes
a demand for payment of differential value added tax within seven days of receipt of notice. However, the rest of the notice is kept intact and the
petitioner is directed to submit its reply to the said notice and the authority is entitled to proceed thereafter in accordance with law. The writ
petition is partly allowed as above. Consequently, M.P. No. 1 of 2013 is closed. No costs.