VADIM INFRASTRUCTURE PRIVATE LIMITED, REP. BY ITS MANAGING DIRECTOR, MR. RAJAMANICKAM RATHINAM, S/O. MR. RATHINAM

VERSUS

THE COMMERCIAL TAX OFFICER, THE STATE TAX OFFICER, CHENNAI

Citation: 2024 taxo.online 632 

In the case of Vadim Infrastructure Private Limited v. The Commercial Tax Officer & Ors (W.P.No.8745 of 2024), the High Court addressed a tax dispute concerning turnover reconciliation and variations between the GSTR 3B return and Form 26AS. The court partially ruled in favor of the petitioner, setting aside the impugned order and directing a reconsideration of the tax demand.

Vadim Infrastructure, represented by Mr. I. Dinesh, contended that the tax demand was based on audit observations, which included discrepancies between turnover figures and differences between the GSTR 3B return and Form 26AS. The petitioner argued that the turnover encompassed business across multiple states and that there was potential duplication between the observed discrepancies. Additionally, Vadim Infrastructure sought an opportunity to contest the tax demand effectively.

The respondents, represented by Mr. C. Harsha Raj, Additional Government Pleader (Tax), argued that the petitioner had been provided multiple opportunities to contest the tax demand. However, they conceded that the petitioner did not provide necessary documents regarding turnover from Tamil Nadu, which weakened their case.

The court acknowledged the petitioner's contentions, recognizing potential duplication between the observed discrepancies and the turnover figures. While noting the petitioner's failure to provide documentation for turnover from Tamil Nadu, the court deemed it appropriate to grant another opportunity to contest the tax demand. However, the court imposed conditions, allowing the respondents to appropriate a percentage of the disputed tax demand from the petitioner's bank account.

The court directed Vadim Infrastructure to remit a portion of the disputed tax demand as per the agreed percentages. Additionally, the court permitted the petitioner to file a reply with supporting documents within three weeks. Upon receipt of the petitioner's reply, the second respondent was instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within two months.

This judgment illustrates the importance of thorough documentation and effective communication in tax disputes. While the petitioner successfully argued for a reconsideration of the tax demand, the court also highlighted the significance of providing comprehensive documentation to support claims. The court's decision to grant another opportunity to contest the tax demand reflects a commitment to fairness and due process in tax proceedings.

Furthermore, the imposition of conditions, such as allowing the respondents to appropriate a portion of the disputed tax demand, demonstrates a balanced approach by the court. It ensures that both parties bear some responsibility in resolving the dispute and encourages the petitioner to engage actively in the process.

Overall, this judgment underscores the complexities involved in tax disputes and the importance of procedural fairness in resolving them. It serves as a reminder to taxpayers to maintain meticulous records and to engage proactively in dispute resolution processes to achieve favorable outcomes. Similarly, it highlights the role of the judiciary in safeguarding the rights of taxpayers while upholding the integrity of the tax system.

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