Over 7K VAT cases of fuel dealers pending in MP, tax bodies seek deemed assessment scheme

Indore: Nearly 7000 VAT cases related to petrol and diesel dealers for FY 2024-25 are pending for assessment in Madhya Pradesh, with tax professionals urging the state govt to introduce a deemed tax assessment scheme to clear the backlog.In a representation to the state GST department, tax professional bodies flagged delays and procedural complexities under the current system. They said the assessment process under Section 20 of the VAT Act requires detailed hearings and reasoned orders in each case, making it difficult to dispose of cases within the stipulated deadline of Dec 31, 2026.They also pointed out that limited use of self-assessment provisions under Section 20-A has contributed to the backlog, leaving a large number of cases unresolved."The present system is time-consuming and resource-intensive. A deemed assessment scheme can help clear pending cases in a time-bound and transparent manner," Madhya Pradesh Tax Law Bar Association president AK Lakhotia said.The issue assumes significance as prolonged delays in tax assessments are impacting fuel dealers by blocking working capital and creating uncertainty in compliance and financial planning.Tax professionals said a deemed assessment framework could enable faster, dispute-free resolution while ensuring timely revenue collection for the govt."Such a scheme will reduce litigation, ease compliance burden and help build trust between taxpayers and the department," Commercial Tax Practitioners Association president Sudhir Mishra said.Stakeholders said the proposal could help unlock pending revenue, reduce appeals and improve administrative efficiency. They added that similar schemes introduced in the past had delivered positive outcomes in terms of faster disposal and higher revenue realisation.With the assessment deadline approaching, stakeholders said an early decision on the proposal would be crucial to prevent further pile-up of cases.