2009 (11) TMI 862 - HC - VAT and Sales Tax

Bogus transactions - Held that - In the instant cases the custom authorities at Bhairwan (Nepal) has informed the Department that they never issued such certificates. In spite of several opportunities the assessee has not brought any certificate issued by the Indian Custom Office at Bhairwan. However the assessee has claimed that custom fee was paid by the dealer who has received the goods in Nepal. The payment was received from Nepal by way of pay order.Hence the transaction pertaining to export becomes doubtful. In the instant cases if the export to Nepal will be found bogus then it will have to be added as a sale in the State. So D.C. (Executive) has rightly restored the cases pertaining to the State Sales Tax Act as well as Central Sales Tax Act for both the assessment years under consideration. Thus the assessing officer will decide the issue de novo by considering the entire evidence and by providing the reasonable opportunity of being heard to the assessee

Summary

Issues:
Assessee's claim of export to Nepal, validity of certificates issued by Nepal Custom Authorities, remand of cases by D.C. (Executive) for fresh adjudication, legal grounds raised by the revisionist, subsequent information received after assessment orders, restoration of cases under State and Central Sales Tax Acts, consideration of new evidence, direction for reassessment by the assessing officer.

Analysis:
The judgment involves four revisions filed by the assessee under section 11 of the U.P. Trade Tax Act against common judgments/orders dated August 31, 1992. The assessee claimed exports to Nepal during the assessment years 1984-85 and 1985-86 supported by certificates issued by Nepal Custom Authorities. However, these certificates were later found to be bogus, leading to a remand by the D.C. (Executive) for fresh adjudication by the assessing authority.

The revisionist contended that only orders related to Central sales tax could be referred to the assessing officer, while cases under the State Trade Tax Act should not be restored. The revisionist also argued against considering subsequent information post-assessment orders, citing legal precedents. The Department, on the other hand, emphasized that the goods were not exported to Nepal, and exemption was wrongly claimed, necessitating inclusion in the U.P. Trade Tax assessment.

The High Court observed that the transactions regarding export to Nepal became doubtful due to discrepancies in certificates, justifying the remand by the D.C. (Executive) for careful examination. The Court agreed with the need to confront subsequent information to the assessee before reassessment, ensuring principles of natural justice. The cases were rightly restored under both State and Central Sales Tax Acts for fresh assessment.

In conclusion, the Court disposed of all four revisions, directing the assessing officer to decide the issue afresh, considering all evidence and providing a reasonable opportunity for the assessee to be heard. The assessing officer was also permitted to admit fresh evidence if necessary, ensuring a just outcome in the proceedings.