2016 (12) TMI 1704 - HC - VAT and Sales Tax

Evasion of tax - Whether on the facts and in the circumstances of the case, has not the appellate tribunal erred in sustaining the alleged suppression against the revision petitioner? - Held that - since it is virtually admitted by the assessee that they had committed suppression and had also compounded the offence, it was then completely within the jurisdictional domain of the Assessing Authority to complete the assessment applying the principles of best judgment based on verification of the documents available and quantification of the same in a manner that is available to them under law. The Assessing Authority or the Tribunal was not required under law to grant the petitioner any opportunity to verify the alleged variations in the presence of the Assessing Authority nor was it bounden upon the Tribunal to make such verification its own as has now been required by the assessee - revision dismissed.

Summary

Issues:
1. Alleged suppression of turnover and additions to the turnover based on the suspected suppression.
2. Admissibility of the evidence and admissions made by the assessee.
3. Denial of natural justice and opportunity to verify the alleged variations in the presence of the Assessing Authority.

Issue 1: Alleged Suppression of Turnover and Additions:
The case involved revisions challenging the order of the Kerala Value Added Tax Additional Appellate Tribunal related to returns for specific months. The Intelligence Officer detected sales suppression by the assessee through a crafty method involving tampering with delivery notes to understate the quantity and value of goods transported. The Assessing Authority found suppression in various months and made additions to the turnover, including 80% for related purchase turnover suppressions under the Act. The First Appellate Authority partly allowed the appeals, reducing the additions, which were further challenged before the Tribunal. The Tribunal allowed the appeals in part by modifying the assessment orders, deleting suspected suppressions to cover probable omissions.

Issue 2: Admissibility of Evidence and Admissions:
The Tribunal considered the contentions raised by the assessee, noting that the assessee had admitted to the suppressions and paid the compounding fee. The Tribunal found that the assessments were based on admissions made by the assessee regarding the method of suppression involving tampering with delivery notes. The Tribunal and statutory authorities acted within their powers under the Act, and the orders relating to suppression and addition of actuals were deemed legal and sustainable.

Issue 3: Denial of Natural Justice and Opportunity for Verification:
The assessee contended that the Tribunal should have allowed an opportunity to verify the alleged variations in the presence of the Assessing Authority. However, the Tribunal rejected this contention, stating that the Statute does not mandate such verification in the presence of the assessee. The burden is on the assessee to establish their case by providing necessary documents and materials to the Assessing Authority. In this case, since the assessee admitted to suppression and compounded the offense, the Assessing Authority had the jurisdiction to complete the assessment based on best judgment without granting the petitioner an opportunity to verify the alleged variations.

In conclusion, the High Court dismissed the revisions, upholding the impugned orders, stating that the Assessing Authority and Tribunal were not required to grant the petitioner an opportunity for verification.