2006 (9) TMI 505 - HC - VAT and Sales Tax

Summary

Issues involved:
1. Quashing of order passed by the Value Added Tax Tribunal on appeal of the assessee.
2. Surrender of income and stock during a survey conducted by the income-tax department.
3. Assessment by the sales tax department based on surrendered stock and discrepancy in trading account.
4. Addition of income in gross turnover by the Assessing Authority.
5. Tribunal's decision to re-examine the matter and remand it to the Assessing Authority.
6. Applicability of the judgment in Girdhari Lal Nannelal v. Sales Tax Commissioner, M.P.
7. Maintainability of writ petition in light of alternative remedy of appeal or revision under the Punjab Value Added Tax Act, 2005.

Comprehensive Analysis:
1. The petition was filed to quash the order passed by the Value Added Tax Tribunal on appeal of the assessee. The petitioner, engaged in the resale of electric and electrical goods, surrendered income and stock during a survey by the income-tax department. The sales tax department considered the surrendered stock in the assessment, noting a discrepancy in the trading account. The Assessing Authority added the surrendered income to the gross turnover, creating an additional demand including a penalty. The appellate authority and Tribunal affirmed the decision.

2. The Tribunal decided to re-examine the matter and remand it to the Assessing Authority after observing that the surrender of stocks before the income-tax authorities could not be the sole basis for assessment, citing the judgment in Girdhari Lal Nannelal v. Sales Tax Commissioner, M.P. The Supreme Court in the mentioned case highlighted the need to show that the acquisition of money by the assessee resulted from transactions liable to sales tax, not from other sources.

3. The petitioner's counsel argued against the remand, citing the apex court's judgment in Girdhari Lal Nannelal's case. However, the court emphasized the necessity to determine if the acquisition of money by the assessee was from transactions subject to sales tax. The counsel was also reminded of the provisions of section 68 of the Punjab Value Added Tax Act, 2005, allowing appeals or revisions to the High Court against Tribunal orders.

4. The court, considering the circumstances, found no grounds to interfere with the Tribunal's decision to remand the matter for fresh assessment by the Assessing Authority. Consequently, the writ petition was dismissed due to the availability of an alternative remedy through appeal or revision under the 2005 Act.