2015 (6) TMI 1017 - HC - VAT and Sales Tax

Demand of tax - Seller of furniture and rubber products - Purchased tyres tubes and flaps i.e. rubber products but no stock was found in godown which meant that petitioner had sold off these entire rubber products - Held that - when a revision has been filed by the petitioner he cannot pursue this remedy of writ. Under the statute the petitioner is bound to deposit 50% of the demand raised and no exceptional reason has been found for why the petitioner should be exempted from depositing 50%. It is to be said so because the petitioner has not denied the transactions but has only stated that he was under the impression that no tax is to be paid. Whether this version of the petitioner is to be believed or not is not for us to decide and the Commissioner shall decide this after hearing the petitioner and/or his counsel. - Petition disposed of

Summary

Issues:
1. Setting aside demand notice and subsequent order of the Department.
2. Assessment of tax liability on rubber products purchased by the petitioner.
3. Petitioner's failure to appear in response to notices and pursue revision petition.
4. Requirement of depositing 50% of the demand raised under the statute.

Analysis:
1. The petitioner sought to set aside the demand notice and subsequent order issued by the Department. The petitioner, a dealer selling furniture and rubber products, purchased rubber products worth &8377; 54,17,838 during the assessment year 2008-09. The income-tax authorities found no stock of rubber products in the petitioner's godown during an inspection, indicating the sale of these products. The assessing officer added a profit margin, resulting in a tax demand of &8377; 6,97,547 and a penalty of 150% with interest, totaling &8377; 18,19,353.

2. Despite filing a revision petition, the petitioner failed to actively pursue the matter for over a year. Upon finally appearing, the petitioner stated the filing of the present petition. The court noted that the petitioner cannot pursue a writ remedy when a revision has been filed. The petitioner's explanation that he believed no tax was payable on locally purchased products was considered, and it was decided that the Commissioner would determine the credibility of this claim after hearing the petitioner and/or his counsel.

3. The court emphasized the statutory requirement for the petitioner to deposit 50% of the assessed amount, which the petitioner had not denied. The petitioner was directed to deposit &8377; 9,45,176.50 within three months to prevent the revision petition from being entertained. Failure to comply would result in dismissal of the petition. If the amount was deposited by a specified date, the Commissioner was instructed to hear and dispose of the revision petition by a set deadline.

This detailed analysis of the judgment from the Tripura High Court addresses the issues raised by the petitioner regarding the tax demand on rubber products, failure to actively pursue the revision petition, and the statutory requirement for depositing 50% of the assessed amount.