2015 (7) TMI 1187 - HC - VAT and Sales Tax

Determination of the estimated turnover of the assessee on one single transaction - Tribunal while passing the impugned order has given no reason why twenty times of the tax payable has been calculated and imposed on the assessee - Held that - no reason has been given for imposing twenty times of the amount and even if it is in the discretion of the Tribunal to fix an amount then too some reasonable basis must be there for formation of this opinion. The decision cannot be taken on a whimsical basis. There is a vast difference between two times and twenty times. No reason at all has been given by the Tribunal in the impugned order for fixing twenty times of the amount - the matter is remitted to the Tribunal for fresh decision - revision allowed by way of remand.

Summary

Issues:
1. Determination of estimated turnover by the Tribunal on a single transaction.
2. Lack of reasoning provided by the Tribunal for imposing twenty times the tax payable.
3. Rejection of the revisionist's plea based on a previous court decision.
4. Remittance of the matter to the Tribunal for a fresh decision.

Analysis:
The High Court addressed the issue of the Tribunal determining the estimated turnover of the assessee on a single transaction amounting to Rs. 70,000. The Court noted that the Tribunal had imposed twenty times the tax payable without providing any reasoning for this decision. The revisionist relied on a previous court decision and argued that in the case of a single transaction, the value of the seized goods plus an equal amount could be considered as the taxable turnover, which in this case was Rs. 70,000. However, the Tribunal rejected this plea without offering any justification for imposing twenty times the amount.

The Court emphasized that decisions made by the Tribunal must have a reasonable basis and cannot be arbitrary. It highlighted the vast difference between two times and twenty times the amount and emphasized the need for a logical basis for such determinations. Consequently, the Court remitted the matter back to the Tribunal for a fresh decision, instructing that the assessee should be given an opportunity to present their case. The Tribunal was directed to make a decision within a month or by the end of August 2015, whichever is earlier.

Furthermore, the Court ordered that the impugned demand would remain stayed until the Tribunal's fresh decision. The Court also specified that the amount to be deposited by the assessee would be 10% of Rs. 1,40,000. Finally, the revision was disposed of, and the Court directed that a copy of the order be provided to the respective counsels within 48 hours upon payment of usual charges.