2014 (9) TMI 900 - HC - VAT and Sales Tax

Refund claim - at the time of assessment tax deductions at source and also tax deposited could not be verified, the assessing officer observed that on verification of the tax deposited by RSRDC and tax deducted at source for which RSRDC was entitled to a set off - RSRDC deposited the tax amount found due by the assessing officer under its order - Subsequently in terms of the liberty recorded in the order of assessment dated 31.03.1997, verification of the tax deposited and tax deducted at source revealed that RSRDC was entitled to a refund with interest thereon from the date of deposit / tax deduction at source till the date of refund - held that - Tax Board has rightly held, that the Additional Commissioner did not adhere to the mandate of Section 87 of the Act of 1994 and proceeded to exercise his powers cursorily, without calling for the record of the assessing officer who had passed the order dated 31.03.1997. It is evident that the Additional Commissioner thus had no material before him to satisfy himself as to how and in what manner the order dated 31.03.1997 passed by the assessing officer of which revision was sought after four years was erroneous and / or prejudicial to the interest of the revenue. No specifics which vitiated the order dated 31.03.1997 were recorded by the Additional Commissioner in his order dated 21.05.2001. Further adequate opportunity was not given to RSRDC to reply to the show cause notice whereby it was proposed to reopen the assessment order dated 31.03.1997 and circumvent the refund found payable to RSRDC on verification of the tax deposited and tax deducted at source. Non address of RSRDC's application for a short adjournment to collect material for replying to the show cause notice issued after a delay of over three years was indicative of unseemly hurry and palpably arbitrary. No specific ground was found by the Additional Commissioner to exercise his revisional powers to undo an order of assessment passed over three years ago on 31.03.1997. It is also apparent in the contextual facts of the case that the Additional Commissioner acted with haste in passing the order dated 21.05.2001 in setting aside the order of assessment dated 31.03.1997 and seeking a reassessment on hypothetical and generalized non-specific grounds. - there is nothing illegal or perverse in the impugned order dated 20.05.2003 under challenge in this revision petition. The said order passed by the learned Board is liable to be upheld. - Decided against Revenue.

Summary

Issues:
1. Revision petition filed under Section 86 of the Rajasthan Sales Tax Act, 1994 against the order of the Tax Board.
2. Refund sought by RSRDC for assessment years 1992-93, 1993-94 & 1994-95.
3. Allegations of shortcomings in the order of assessment dated 31.03.1997.
4. Proceedings initiated under Section 87 of the Act of 1994.
5. Challenge before the Tax Board on the order dated 21.05.2001 by the Additional Commissioner.
6. Adherence to the mandate of Section 87 of the Act of 1994.
7. Exercise of revisional powers without specific grounds.
8. Haste in passing the order dated 21.05.2001 for reassessment.

Analysis:
1. The revision petition was filed against the order of the Tax Board, which allowed the appeal by RSRDC seeking refunds for the assessment years 1992-93, 1993-94 & 1994-95. The assessing officer observed discrepancies in tax deductions and deposits, leading to a modification of the assessment order. RSRDC sought refunds as per the modified assessment but faced delays and unresponsiveness.
2. Allegations of shortcomings in the assessment order led to proceedings under Section 87 of the Act of 1994. The Additional Commissioner initiated the re-opening of the assessment order dated 31.03.1997 without providing specific grounds and without allowing RSRDC adequate opportunity to respond.
3. The Tax Board found the Additional Commissioner's exercise of revisional powers to be mechanical and lacking application of mind, leading to a hasty decision. The Additional Commissioner failed to adhere to the requirements of Section 87 and did not establish clear grounds for revising the assessment order.
4. The High Court upheld the decision of the Tax Board, ruling that the Additional Commissioner acted without proper justification and in haste. The impugned order dated 20.05.2003 was deemed legal and valid, dismissing the revision petition for lacking merit.