Madras High Court Directs Dept. To Investigate Misuse Of Login ID By Unknown Person Facilitating Tax Evasion

The Madras High Court has directed the state tax officer to investigate the misuse of login IDs by unknown persons facilitating tax evasion.The bench of Justice C. Saravanan has observed that the petitioner alleged that the petitioner's login ID was misused by a third party, who filed returns and passed on a huge input tax credit to the third party.The petitioner/assessee submitted that a notice has been issued seeking to recover the amount of Rs. 11,63,24,233 without even serving a copy of the assessment order.The petitioner was a dealer engaged in the business of outward supply of curtains, form mattresses, and pillows. The petitioner was carrying on the business for almost 28 years and 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.The petitioner was filing regular returns electronically until December 2013 in terms of the provisions of the TNVAT Rules, 2007. Since January 2014, the petitioner has experienced a problem. The petitioner was unable to log in and file a return in the portal as the petitioner's attempt to log in was declined on the screen as an 'invalid login account'. The petitioner has therefore filed returns manually and escalated the issue with the respondent on 06.02.2014, 22.12.2014, 09.02.2015, and 02.07.2015.The respondent or department submitted that the impugned recovery notice does not call for interference. The petitioner has suffered an assessment order dated November 9, 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 held that the Commercial Tax Department shall coordinate with the rest of the respondents and investigate the complaint of the petitioner. This exercise shall be completed within a period of 18 months from the date of receipt of a copy of the order. Till the investigation is completed, all revenue recovery proceedings against the petitioner shall be kept in abeyance. 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.Counsel For Petitioner: Hari RadhakrishnanCounsel For Respondent: K.VasanthamalaCase Title: M/s.Shewil Trading Company Versus The Commissioner of Commercial TaxesCitation: 2023 LiveLaw (Mad) 353Case No.: W.P.No.26493 of 2022 and W.M.P.Nos.25555 & 25556 of 2022Click Here To Read The Order

Madras High Court Directs Dept. To Investigate Misuse Of Login ID By Unknown Person Facilitating Tax Evasion

Mariya Paliwala

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Madras High Court Directs Dept. To Investigate Misuse Of Login ID By Unknown Person Facilitating Tax Evasion

Mariya Paliwala

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INR 1099+GST

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