The Madras High Court in the case M/s. Shewil Trading Company Versus the Commissioner of Commercial Taxes observed and has directed the tax officer to investigate the misuse of login IDs by unknown persons facilitating tax evasion.
The bench headed by Justice C. Saravanan in the case observed and has stated that the petitioner in the plea alleged that the petitioner’s login ID was misused by a third party, who had filed returns and has passed a huge input tax credit to the third party.
Before the court, the petitioner or assessee submitted that a notice has been issued wherein seeking to recover the amount of Rs. 11,63,24,233 without even serving the copy of the assessment order.
In the present case, the petitioner who being the dealer engaged in the business of outward supply of curtains, form mattresses, and pillows. Thus, the petitioner was carrying on the business for almost 28 years and has filed manual returns under the provisions of the erstwhile TNGST Act, 1959, and electronically under the provisions of the TNVAT Act, 2006, for the assessment year 2009–2010.
However, the petitioner was filing the regular returns electronically until December 2013 in terms of the provisions of the TNVAT Rules, 2007 and the petitioner since January 2014 experienced the problem.
Therefore, the court observed that the petitioner was unable to log in and to file a return in the portal as the attempt of the petitioner’s to log in was declined on the screen as an ‘invalid login account’ and that the petitioner filed returns annually and escalated the issue with the respondent on 06.02.2014, 22.12.2014, 09.02.2015, and 02.07.2015.
On Other hand, it has been submitted by the respondent or department that the impugned recovery notice does not call for interference. Thus, the petitioner has suffered an assessment order dated 09.11.2021, which preceded a notice prior to the passing of the said order. However, the petitioner failed to participate in the assessment proceedings.
The court in the case observed and has held that the Commercial Tax Department shall coordinate with the rest of the respondents and investigate the complaint of the petitioner.
Further, the court stated that the exercise shall be completed within a period of 18 months from the date of receipt of a copy of the order and till the investigation is completed, all the revenue recovery proceedings initiated against the petitioner shall be kept in abeyance. Thus, if the complaint of the petitioner turns out to be untrue or was intended to facilitate fraud being committed using the login ID of the petitioner, the assets of the petitioner shall be brought to sale.
The counsel, Advocate Hari Radhakrishnan appeared for the petitioner.
The counsel, Advocate K. Vasanthamala represented the respondent.
