Disposed

Tvl.Sree Rengaraaj Steel & v. The Assistant Commissioner

Madras HC26 Jul 2017WP/6542/2017

Case brief

AI extract

What is this about?

The High Court disposed of multiple writ petitions challenging notices to reverse Input Tax Credit. Having directed an inspection which revealed a manufacturing loss of 1.01% contrary to the proposed 11%, the court directed the petitioner to file objections within 15 days seeking assessment based on the actual reported loss.

What did the court decide?

Petitioner to submit objections within 15 days; respondent to afford personal hearing; assessment to be completed based on 1.01% loss.

Tvl.Sree Rengaraaj Steel & Vs The Assistant Commissioner — Banking and Recovery | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated : 26.07.2017 Coram

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The Hon'ble Mr.Justice T.S.Sivagnanam

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Writ Petition Nos.6542 to 6546 of 2017

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and

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W.P.M.P.Nos.7040 to 7044 of 2017

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Tvl. Sree Rengaraaj Steel & Alloys (P) Ltd., rep. by its Director, Mr.P.Srinivasan

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...Petitioner Vs.

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The Assistant Commissioner (CT) Suramangalam Assessment Circle, Salem. ...Respondent

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Writ Petition, filed under Article 226 of the Constitution of India, for issuance of Writ of Certiorarified Mandamus to call for records on the file of the respondent, in TIN : 33812640956/2011-12, 2012-13, 2013-14, 201415 and 2015-16, dated 08.02.2017, and to quash the same and further, to direct the respondent to inspect and examine the manufacturing process before the assessment as directed by this Court,in the judgment reported in (2015) 81 VST 389 (Madras).

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For Petitioner : Mr.R.Senniappan

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For Respondent : Mr.K.Venkatesh

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http://www.judis.nic.in

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Government Advocate C O M M O N O R D E R

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Heard Mr.R.Senniappan, the learned counsel appearing for the

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petitioner and Mr.K.Venkatesh, the learned Government Advocate for the

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respondent.

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The petitioner, who is a registered dealer, on the file of the respondent, under the provisions of the Tamil Nadu Value Added Tax Act, 2006 (henceforth, referred to as 'the TNVAT Act) has filed these Writ Petitions, challenging the notices issued by the respondent, dated 08.02.2017, for the assessment years 2011-12 to 2015-16, proposing to reverse the Input Tax Credit (ITC) availed by the petitioner on the ground that the loss of inputs has to be adopted at the rate of 11%.

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The petitioner's case is that, such uniform percentage cannot be fixed by relying the decision rendered in the case of ( Interfit Techno Products Ltd., Vs. Principal Secretary/Commissioner of Commercial

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Taxes, Ezhilagam, Chepauk, Chennai and another) reported in 2015 81

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VST 389 (Madras).

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http://www.judis.nic.in

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When these Writ Petitions came up for admission before this

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Court, order of interim direction was issued on 17.03.2017, directing the

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respondent to inspect the petitioner's Factory and examine the manufacturing process and submit a report. This direction has been carried out by the respondent, and a report has been submitted to the learned Special Government Pleader, vide letter, dated 17.04.2017, and surprisingly, it is found that the manufacturing loss noticed is only 1.01%, in contradiction with the percentage of 11% of loss of inputs proposed in the impugned notices. Thus, it is clear that, after conducting inspection, the correct percentage of loss has been determined by the Assessing Officer, and this is what this Court directed the respondent/Assessing Officer to do in the light of the decision rendered in Interfit Techno Product's case (referred to supra).

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In view of the subsequent developments taken place in these

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matters, these Writ Petitions are disposed of, by directing the petitioner to

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submit their objections to the impugned notices, by taking into consideration the report submitted by the respondent, dated 21.04.2017,

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http://www.judis.nic.in

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within a period of 15 days from the date of receipt of a copy of this order. After which, the respondent shall afford an opportunity of personal hearing

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to the petitioner, and complete the assessment in accordance with law. It is needless to state that the respondent is entitled to proceed only as per the report submitted before this Court, determining the total invisible loss at

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1.01% percentage. No costs. Consequently, connected Writ Miscellaneous
Petitions are closed.
26.07.2017
sd
Index : yes/no
To
The Assistant Commissioner (CT)
Suramangalam Assessment Circle,
Salem.

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http://www.judis.nic.in

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T.S.Sivagnanam, J.

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Writ Petition Nos.6542 to 6546 of 2017
(Five Cases)

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26.07.2017

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http://www.judis.nic.in