2010 (12) TMI 1113 - HC - VAT and Sales Tax

Whether, in the facts and circumstances of the case, the Gujarat Value Added Tax Tribunal has erred in law in taking into consideration irrelevant material and ignoring the relevant material on record? Held that - The Tribunal has merely recorded that certain specific instances have been mentioned in the assessment order for rejecting the genuineness of transactions and that the appellant has not countered such specific instances and has deemed it proper to remain silent on it for the reasons best known to him. That, findings of non-existence of the transport company are more eloquent. Thus, the findings recorded by the Tribunal clearly suffer from non-application of mind. When the assessee has raised specific contentions before the Tribunal, the Tribunal is required to apply its mind to the said contentions and after appreciating the evidence on record, record its findings in respect thereof. In the present case, the Tribunal has abdicated its duties of appreciating the evidence on record and recording its findings and has merely brushed aside the submissions made by the assessee without even a reference thereto. The impugned order of the Tribunal therefore stands vitiated and cannot be sustained. The question is answered in the affirmative

Summary

Issues:
Challenge to Tribunal's judgment under section 78 of the Gujarat Value Added Tax Act, 2005 - Four questions raised regarding rejection of appellant's claim under section 6A of the Central Sales Tax Act, confirmation of assessing officer's order, adverse inference drawn against appellant, and consideration of relevant factors by the Tribunal.

Analysis:
1. Rejection of Claim under Section 6A of the Central Sales Tax Act:
The appellant challenged the rejection of their claim under section 6A of the Central Sales Tax Act by the Tribunal. The appellant contended that the Tribunal disregarded evidence without providing cogent reasons for dismissal. The Tribunal's reliance on presumptions and assumptions was criticized, arguing that the assessment lacked a basis and was made without affording the appellant an opportunity to address the material gathered behind their back. The appellant sought a quash of the Tribunal's order.

2. Confirmation of Assessing Officer's Order:
The assessing officer's order, rejecting the appellant's claims and raising a substantial demand, was confirmed by the appellate authority and the Tribunal. The appellant argued that the assessing officer's findings were based on assumptions and presumptions, with reliance on material gathered without disclosure to the appellant. The lack of consideration for evidence and failure to provide an opportunity to respond were highlighted as breaches of natural justice.

3. Adverse Inference Drawn Against Appellant:
The Tribunal drew adverse inferences against the appellant, alleging silence on specific instances mentioned in the assessment order. The appellant argued that the Tribunal failed to appreciate the evidence on record and did not address the contentions raised. The Tribunal's decision was criticized for not applying its mind to the appellant's submissions and for dismissing the appeal without proper consideration.

4. Consideration of Relevant Factors by the Tribunal:
The Tribunal was accused of ignoring relevant material on record and considering irrelevant factors, leading to a perverse order. The appellant contended that the Tribunal failed to enumerate specific instances and based its findings on material gathered behind the appellant's back. The Tribunal's decision was deemed to suffer from non-application of mind, as it did not address the appellant's contentions and evidence properly.

In conclusion, the High Court found that the Tribunal erred in law by considering irrelevant material and ignoring relevant evidence. The Tribunal's order was quashed and set aside, with the appeal restored for fresh consideration, emphasizing the importance of providing a reasonable opportunity of hearing to the parties. The Court highlighted the necessity for proper appreciation of evidence and adherence to principles of natural justice in tax assessment proceedings.