Partly allowed

The Union of India v. the Assistant Commissioner

Madras HC13 Feb 2020WP/13439/2013

Case brief

AI extract

What is this about?

In a writ petition under Article 226, the Madras High Court held that the Central Government Department was under a bonafide belief regarding return filing obligations. The court quashed assessment orders and remitted the case to the respondent to pass a fresh order on merits for two assessment years while staying recovery proceedings.

What did the court decide?

Quashed assessment orders for AYs 2007-08 and 2008-09. Case remitted to pass fresh order on merits within 3 months. Recovery proceedings stayed.

The Union of India Vs the Assistant Commissioner — GST and Indirect Tax | Madras HC (2020)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.02.2020 CORAM THE HON'BLE MR. JUSTICE C. SARAVANAN W.P. No. 13439 of 2013 and M.P. No. 1 of 2013

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The Union of India, Owning the Integral Coach Factory, Rep. by its General Manager, No.20, Constable Road, Perambur, Chennai – 600 038.

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... Petitioner -vs-

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The Assistant Commissioner (CT), Perambur II, Assessment Circle, Perambur, Chenai – 600 011.

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... Respondent

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Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, calling for the entire records relating to the impugned orders dated 22.02.2013, 22.02.2012 and 10.04.2013, passed by the respondent and to quash the same.

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For Petitioner : C.V.Ramachandra Murthy Senior Panel Counsel For Respondent : Mr. R.Swarnavel Government Advocate O R D E R

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The petitioner is the Department of the Union of India, under the Ministry of Railways. It is engaged in the manufacture of railway coaches. In the course of manufacture of coaches, the petitioner generates “waste and scrapes” which were sold to various buyers under Tender.

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The petitioner had obtained registration under the Tamil Nadu General Sales Tax Act, 1959 but had failed to file returns. At the same time, the petitioner has remitted the tax collected from the sale of waste and scrap at 4%. Since the petitioner had failed to file returns, the Assistant

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https://hcservices.ecourts.gov.in/hcservices/

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Commissioner, Income Tax Department issued notice dated 01.08.2011, under Section 22(4) of the TNVAT Act, 2006 and proposed a turnover of Rs.21,56,89,100/- applying the best of judgment for the year 2007-2008. Similar notice was also issued for the assessment year 2008-2009.

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These notices were ultimately culminated in separate assessment order dated 08.05.2012, for the respective assessment orders. The petitioner has not filed any appeal against these orders and therefore the respondent have initiated recovery proceedings vide impugned notices dated 22.02.2013 and 10.04.2013.

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It is the contention of the learned counsel for the petitioner that the petitioner was not required to file returns under the provision of TNVAT Act, 2006 as it is a Central Government Department. In this connection a reference was made to clarification issued to the Heavy Vehicles Factory, Avadi, Chennai-54 on 27.06.2007 TIN Number where the following queries were answered as under:

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Sl. Queries Reply No. 1 Whether TIN Number TIN Number is not mandatory for is mandatory for Central Government Department. They Central Government are deemed dealers as per Explanation Department II to Section 2(15) to TN VAT Act, 2006. They should raise sale invoice/tax invoices, collect tax at the appropriate rate and pay the same to the State Government. Unless they exhibit the tax element separately, the purchase cannot claim Input Tax Credit. 2 Is it mandatory for No TIN Number is necessary (or) our suppliers to Mandatory for them. A letter from the have our TIN Number Department is sufficient to the and they cannot buyers/sellers. supply the items in the absence of the same.

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The petitioner also approached the Commissioner of Commercial Tax Office with similar request and by a communication dated 20.07.2007, the clarification was issued to the petitioner Railway and same was made applicable to the petitioner. The petitioner was under a bonafide belief that it was not required to file returns and therefore did not file

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https://hcservices.ecourts.gov.in/hcservices/

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returns. However, the petitioner has paid the tax on the amount collected from various scrap dealers. Since no appeals have been filed against the assessment orders dated 08.05.2012, the impugned recovery proceedings have been initiated. The valuation adopted by the petitioner has been countermanded. I am therefore inclined to remit the case back to the respondent to pass a fresh order for the two assessment years. Both the orders dated 08.05.2012, which stand quashed shall be treated as show cause notice.

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The petitioner may file its objections within a period of 30 days from the date of receipt of a copy of this order. The respondent shall pass thereafter appropriate order on merits within in a period of three months from the date of receipt of a this order. The impugned recovery proceedings shall be kept in abeyance and further recovery proceedings shall be in subject to the orders to be passed by the respondent pursuant to this order.

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With the above observation, the writ petition stands disposed of accordingly. No Costs. Consequently, connected miscellaneous petition is also closed.

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Sd/-
Asst.Registrar (CS VII)
/true copy/
Sub Asst. Registrar
ssi
To

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The Assistant Commissioner (CT), Perambur II, Assessment Circle, Perambur, Chenai – 600 011.

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+1 cc to Special government Pleader(Taxes) sr12891 +1 cc to Mr.C.V.Ramachandramurthi Advocate sr11702

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W.P. No. 13439 of 2013

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aa19/03/2020

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https://hcservices.ecourts.gov.in/hcservices/

The Union of India v. the Assistant Commissioner

Case brief

What is this about?

What did the court decide?

The Union of India v. the Assistant Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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