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2016 (1) TMI 1222 - HC - VAT and Sales TaxNatural justice - Best judgement assessment - imposition of penalty u/s 37(2) of the Assam Value Added Tax Act read with Section 8 of the Assam Entry Tax Act, 2001 - import of chemical - taxable @ 2% under the Assam Entry Tax Act, 2008 as per entry No. 51 of the Schedule - Held that - though the written submission of the petitioner dated 21.06.2015, that was submitted pursuant to the Notice of the Assessing Officer dated 20.11.2014 & 11.06.2015, was available before him, but the Assessing Officer did not consider the same while passing the impugned order of best judgment assessment dated 28.08.2015, considering it to be incomplete or incorrect. The said impugned order also does not reflect that the departmental authority adduced proper evidence and discharge the burden of proof with regard to such finding. The impugned assessment order dated 28.08.2015 is vitiated in law and accordingly the same is set aside - petition allowed - decided in favor of petitioner.
Issues Involved:
1. Determination of import value. 2. Service of statutory notice. 3. Adherence to principles of natural justice. 4. Classification of goods under the Assam Entry Tax Act, 2008. Issue-wise Detailed Analysis: 1. Determination of Import Value: The petitioner company, engaged in manufacturing medicines, imported raw materials worth Rs. 8,42,12,433/- during 2005-06. The Assistant Commissioner of Taxes issued a show cause notice alleging the company failed to pay entry tax on chemicals, which are taxable at 2% under the Assam Entry Tax Act, 2008. The assessment included freight charges, resulting in a total import value of Rs. 8,67,12,919/-. The petitioner contested this, claiming the import value was determined arbitrarily without materials on record. 2. Service of Statutory Notice: The petitioner argued that the statutory notice in Form 21, as required under Rule 23 of the Assam Value Added Tax Rules, 2005, was not served. The Assistant Commissioner issued a detailed notice on 25.03.2011, which the petitioner claimed did not adhere to the prescribed format. The appellate authority (ABR) found the notice contained more information than Form 21 but granted only three working days for the petitioner to respond, which was deemed insufficient. 3. Adherence to Principles of Natural Justice: The petitioner was given only three working days to respond to the notice, and their request for a 15-day extension was denied. The ABR concluded that the Assessing Officer did not adhere to the principles of natural justice, as the short response time prevented the petitioner from presenting a proper defense. Consequently, the ABR remanded the case for fresh assessment, emphasizing the need for reasonable opportunity for the petitioner to present their case. 4. Classification of Goods under the Assam Entry Tax Act, 2008: The petitioner contended that out of 112 imported items, only 12 items worth Rs. 11,35,075/- were chemicals subject to entry tax. The remaining items were not chemicals and should not be taxed under Entry 51 of the Schedule to the Assam Entry Tax Act, 2008. The Assessing Officer, however, classified 107 items as chemicals without providing proper evidence or discharging the burden of proof. The court emphasized that the burden of proof lies with the Revenue to classify goods correctly and that mere assertion is insufficient. Conclusion: The court found that the impugned assessment order dated 28.08.2015 was vitiated in law as it did not consider the petitioner's submissions, lacked proper evidence for classification of goods, and did not adhere to the principles of natural justice. The assessment order was set aside, and the authority was directed to complete the assessment in accordance with the law, ensuring the petitioner is given a reasonable opportunity to present their case. The writ petition was allowed accordingly.
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