Madras High Court
M/S. Hanon Automotive Systems ... vs The Deputy Commissioner (Ct) Iv on 6 December, 2021
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.12.2021
CORAM
THE HONOURABLE MR.JUSTICE R.MAHADEVAN
and
THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
and
C.M.P. Nos. 19592, 19415, 19402 and 19485 of 2021
M/s. Hanon Automotive Systems India Pvt. Ltd.
(Formerly known as Visteon Automotive Systems Pvt. Ltd.)
Rep. by its Authorized Signatory
Mr. T.A. Bhaskaran
Keekaranai Village
Malrosapuram Post
Chengalpet – 603 204. .. Appellant in all the appeals
Versus
The Deputy Commissioner (CT) IV
Large Taxpayers Unit
V Floor, Dugar Towers
No.34, Marshalls Road
Chennai – 600 008. .. Respondent in all the
appeals
Appeals filed under Clause 15 of the Letters Patent to set aside the
common order dated 19.07.2021 passed in W.P. Nos. 22198 to 22201 of 2016.
For Appellant : Mr. K.Vaitheeswaran
in all the appeals
For Respondent : Mr. V. Prashanth Kiran
Government Advocate (Taxes)
in all the appeals
https://www.mhc.tn.gov.in/judis
1/8
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
COMMON JUDGMENT
(Judgment of the Court was delivered by R.Mahadevan, J.)
These intra-court appeals have been filed challenging the common order
dated 19.07.2021 passed in W.P. Nos. 22198 to 22201 of 2016.
2. For the sake of brevity, the relief sought in the writ petitions is to
issue a writ of certiorarified mandamus to call for the records of the respondent
in the impugned revision order in TIN Nos.33910904989/2011-12,
33910904989/2012-13, 33910904989/2013-14 and 33910904989/2014-15.
3. Facts
leading to the filing of these writ appeals would run thus:
3.1. The appellant is engaged in the business of manufacture and sale of
automobile components. They are registered as dealer with the respondent
under the Tamil Nadu Value Added Tax Act, 2006 (in short, 'The Act'). For the
assessment years 2011-12, 2012-13, 2013-14 and 2014-15, the appellant
availed input tax credit by furnishing all the documentary evidence and filed
their return. On receipt of the same, the respondent issued pre-revision notices
proposing to impose differential Value Added Tax (VAT) at the rate of 9.5% on
the sale of goods to Hundai Motors and Ford India alleging non-production of
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
industrial input certificate.
3.2 . According to the petitioner, scrap fall under Entry 67A,
Part B of the First Schedule and tools under Entry 138, Part -B, First Schedule
and sale of used cars are subjected to 5% tax, vide G.O.Ms.No.78 dated
11.07.2011 and the rate of tax for scraps, tools and used cars is 5% without
any requirement of industrial input certificate. In the pre-assessment notices, it
was proposed to impose tax on the ground that there is a mismatch between
the purchases reported by the appellant and the corresponding sales reported
by the vendors. However, no list was enclosed or details provided in the said
notices for the appellant to cross verify and provide necessary information. On
receipt of the same, the appellant sent a detailed reply dated 07.10.2015
pointing out several procedural infirmities and requested to furnish the list to
enable them to file proper reply. It was also pointed out in the reply that the
sale of scrap is eligible for 5% tax without the requirement of industrial input
certificate. Notwithstanding such reply, the Assessing officer passed the orders
dated 30.05.2016 imposing higher rate of tax on the sale of scrap, tools and
used cars on the ground that industrial input certificate has not been produced.
3.3. When it was pointed out by the appellant regarding certain
arithmetical error, applicability of the rate of tax for scrap, tools and used cars,
etc., the Assessing Officer accepted the same and passed the revised orders on
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
31.05.2016 concluding that the scrap qualifies only 5% rate without the
requirement of industrial input certificate, but confirmed the demand on sale of
tools and used cars for non-production of industrial input certificate and also
confirmed the input tax credit reversal and alleged mismatch between
purchases reported by the appellant and sales reflected in the statement of
vendors without providing the details or list of such dealers.
3.4. Challenging the said orders of assessment dated 31.05.2016, the
appellant preferred WP.Nos.22198 to 22201 of 2016 before the learned single
Judge mainly on the ground that in the absence of the list furnished by the
Assessing Officer, the appellant could not file an effective reply with respect to
the so-called mismatch between the purchases reported by the appellant and
the sales reported by the vendors.
3.5. However, by order dated 19.07.2021, the learned single Judge
refused to interfere with the assessment orders dated 31.05.2016 on the ground
that there is an alternative remedy available to the appellant and hence, the writ
petitions filed by them without exhausting such remedy, are not maintainable
and accordingly, all the writ petitions were dismissed. Therefore, these writ
appeals by the appellant /assessee.
4.The learned counsel for the appellant would contend that on receipt of
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
the pre-assessment notices, the appellant made a request to furnish the details
of the documents, based on which the input tax credit was proposed to be
rejected. Despite the same, such details were not furnished to the appellant,
which prevented them from submitting an effective reply canvassing both legal
and factual aspects. Therefore, the orders dated 31.05.2016 passed by the
respondent are in gross violation of principles of natural justice. The learned
counsel would further contend that when there is violation of principles of
natural justice, invoking the discretionary relief provided under Article 226 of
The Constitution of India is proper; and the existence of alternate remedy is not
a bar for filing writ petitions. However, the learned Single Judge relegated the
appellant to approach the appellate authority by filing appeals by the orders
impugned herein, which are arbitrary, erroneous and against the setted
principles of law.
5.On the above contentions of the learned counsel for the appellant, we
have heard the learned Government Advocate (Taxes) appearing for the
respondent, who supported the orders of assessment and also perused the
materials placed.
6.It is the specific plea of the appellant that the Assessing Officer,
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
without furnishing the list containing the details of the sales made by the
appellant's vendors has concluded that there is a mismatch between the
purchases reported by the appellant and the corresponding sales reported by
the vendors. Even in the reply to the pre-assessment notices, the appellant
specifically requested the Assessing Officer to furnish such a list to enable them
to submit an effective representation. However, the respondent, without
furnishing the list, has passed the orders dated 31.05.2016 impugned in the
writ petitions, levying tax on the appellant, which are arbitrary, illegal and
violative of the principles of natural justice, in the opinion of this court.
However, the learned Single Judge while disposing of the writ petitions,
granted liberty to the appellant to file appeals before the appellate authority.
Such course adopted may be an empty formality, especially when the appellant
complained of the violation of the principles of natural justice and admittedly,
the required details were not furnished by Assessing officer, despite repeated
demands. Therefore, on this score alone, we are inclined to set aside the orders
passed by the learned single Judge as well as the Assessing Officer and remand
the matter back to the respondent for fresh consideration.
7.Accordingly, the order dated 19.07.2021 passed in WP Nos. 22198 to
22201 of 2016 as well as the assessment orders dated 31.05.2016 passed by
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
the respondent, are set aside and the matter is remanded back to the assessing
officer/respondent for fresh consideration. The respondent shall furnish all the
copies of material documents to the appellant, afford adequate opportunity to
submit their reply/objection and thereafter, pass a fresh order on merits and in
accordance with law, within a period of eight (8) weeks from the date of receipt
of a copy of this judgment.
8.All the writ appeals stand allowed to the extent as indicated above. No
costs. Consequently, connected miscellaneous petitions are closed.
[R.M.D., J.] [M.S.Q., J.]
06.12.2021
Index : Yes/No
Speaking/Non-Speaking Order
Maya/rsh
To
The Deputy Commissioner (CT) IV
Large Taxpayers Unit
V Floor, Dugar Towers
No.34, Marshalls Road
Chennai – 600 008.
https://www.mhc.tn.gov.in/judis
W.A. Nos. 2886, 2888, 2900 and 2901 of 2021
R. MAHADEVAN, J
and
MOHAMMED SHAFFIQ, J
Maya/rsh
WA Nos. 2886, 2888, 2900
and 2901 of 2021
06.12.2021
https://www.mhc.tn.gov.in/judis
