2013 (6) TMI 698 - HC - VAT and Sales Tax

Summary

Issues involved:
The judgment involved issues related to the deletion of sales suppression, violation of natural justice, and consequential penalty on sales suppression.

Deletion of Sales Suppression:
The Sales Tax Appellate Tribunal deleted the suppression made in respect of two invoice numbers when those invoices were not accounted for in the assessee's books. The Tribunal found that the assessment made was in violation of the principles of natural justice as the enforcement officers verified documents without explaining to the assessee. The Tribunal held that the basis of assessment was not furnished, leading to the cancellation of the assessment and rejection of the Revenue's appeal. The High Court agreed that non-furnishing of documents could set aside the assessment, but directed a fresh proceeding by remanding the matter back to the assessing officer for a de novo hearing. The assessing authority was instructed to provide the documents sought by the assessee and grant an opportunity for objections to finalize the assessment in accordance with the law.

Violation of Natural Justice:
The Tribunal dismissed the appeal of the Department citing a violation of the principle of natural justice. It was noted that the assessment was hurriedly made without providing copies of documents and without proper explanation to the assessee during the inspection. The High Court agreed that the assessment lacked proper reasoning and directed a fresh hearing to allow the assessee to present objections and finalize the assessment lawfully.

Consequential Penalty on Sales Suppression:
The Sales Tax Appellate Tribunal deleted the consequential penalty on sales suppression. The High Court, while setting aside the Tribunal's order, restored the matter for a de novo hearing to the assessing officer. The assessing authority was directed to provide necessary documents to the assessee, grant an opportunity for objections, and finalize the assessment in accordance with the law. After giving the assessee an opportunity, the assessing authority was permitted to conclude the assessment as per legal requirements.

The tax case revision was disposed of without costs.