TNVAT - Levy of 300% penalty under Section 27(4) for reversal of ITC under TNVAT Act 2016

HIGHER PENALTY WILL BE LEVIED IN CERTAIN CASES OF REVERSAL OF INPUT TAX CREDIT.

        Section 27(2) of TNVAT Act, 2006:

        Assessment of escaped turnover and wrong availment of input tax credit—Where for any reason, the input tax credit has been availed wrongly or where any dealer produces false bills, vouchers, declaration certificates or any other documents with a view to support his claim of input tax credit or refund, the assessing authority shall, at any time, within a period of five years from the date of order of assessment, reverse input tax credit availed and determine the tax due after making such a enquiry, as it may consider necessary:

Provided that no order shall be passed under sub-section 27(2) without giving the dealer a reasonable opportunity to show cause against such order.

LEVY OF PENALTY FOR THE ABOVE SECTION  INCREASED TO 300%

          As per Section 27 (4) of the Tamil Nadu Value Added Tax Act, 2006 (Amended as per Act No. 13 of 2015 came into force with effect from 29.1.2016), the assessing authority shall direct the dealer to pay as penalty a sum which shall be three hundred per cent of the tax due in respect of such claim in addition to the tax determined under Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006.

        Provided that no penalty shall be levied without giving the dealer a reasonable opportunity of  showing cause against such imposition.

https://ctd.tn.gov.in/documents/10184/10943/217+%28Act+No.13%29/5c4ced0a-6170-4f1e-b1ba-741f5f596885?version=1.1