1995 (7) TMI 405 - HC - VAT and Sales Tax

Summary

Issues: Assessment based on unaccounted transactions, stock discrepancy, penalty levy without mention in pre-assessment notice, fixation of taxable turnover based on recovered slips.

Analysis:
1. The case involves a jeweler being assessed for the assessment year 1980-81 based on 22 slips recovered during an inspection, which revealed unaccounted transactions and stock discrepancies. The taxable turnover was calculated at Rs. 2,16,444, leading to the imposition of tax, additional sales tax, and penalty.

2. The Appellate Assistant Commissioner initially considered the stock discrepancy as negligible and sustained the assessment based on specific slips, reducing the penalty. However, the Joint Commissioner, in a suo motu revision, set aside the Appellate Assistant Commissioner's order and reinstated the assessing officer's decision.

3. The issue of penalty levy without mention in the pre-assessment notice was raised by the appellant's counsel. Upon verification, it was confirmed that the pre-assessment notice did not include any reference to penalty. Consequently, the court held that the penalty levy was unwarranted and needed to be deleted.

4. The fixation of taxable turnover based on the recovered slips was contested by the appellant's counsel. After reviewing the slips and the assessee's statement, the court found no valid reason to interfere. The appellant's counsel conceded to the unaccounted transactions in some slips, leading to the confirmation of the assessing authority's decision by the court.

5. The court emphasized the importance of timely responses to notices, noting the delay in the appellant's reply to the pre-assessment notice. The court upheld the Joint Commissioner's decision regarding the assessment but set aside the penalty levy due to the absence of mention in the pre-assessment notice. The appeal was partly allowed, with the penalty being deleted.