2015 (3) TMI 913 - HC - VAT and Sales Tax

Levy of tax, interest and penalty - Whether, in the facts and the circumstances of the case, the Appellate Tribunal was justified, in upholding the findings of reassessment officer which proceeds merely on the allegations of show-cause notice dated October 22, 2010 issued by the Directorate-General of Central Excise, without any independent investigation - Held that - Reassessing officer has found that the sales were shown in the books of 160 Chhakdo rickshaws and it was found that actually the appellant had cleared 326 Chhakdo rickshaws. Thus, 166 Chhakdo rickshaws were in excess, which were not accounted for in the sales of the appellant and hence, reassessing authority passed an order with respect to the said 166 Chhakdo rickshaws. It was the case on behalf of the appellant that the appellant was doing the job-work and assembling the rickshaws from the spare parts purchased by the prospective customers and he also produced some documents in support of his contention that he was doing the job-work of assembling the rickshaws. However, no other supporting documents/bills of engine or chassis in the name of third parties/prospective customers were placed on record. The appellant produced the contracts with (1) Maldebhai Masribhai Chavda, (2) Sadurbhai Kalubhai Manek, (3) Sureshbhai Madhavdas Danidharia in support of his case that they entered into contract with the appellant for assembling the rickshaw, however, the appellant did not produce the bill of engine or chassis in the name of the aforesaid persons. He did not produce any other documentary evidences in support of his case that the spare parts, engine, chassis, etc., were purchased by the prospective customers and that the appellant was doing the job-work. In absence of any supporting documents/documentary evidences, the reassessing officer as well as the Tribunal, both have rightly disbelieved the case on behalf of the appellant that he was doing the job-work and assembling the rickshaw from the spare parts purchased by the prospective customers. It is also required to be noted at this stage that even the registration of the rickshaws were by the appellant himself. It cannot be said that the Tribunal has committed any error in confirming the reassessment order. The finding of fact given by all the authorities below are on appreciation of evidence which are neither perverse nor contrary to the evidence on record. Under the circumstances, as such no question of law much less substantial question of law arise in the present appeal. - Decided against assessee.

Summary

Issues:
1. Whether the Tribunal was justified in upholding the findings of reassessment officer based on a show-cause notice without independent investigation?
2. Whether the impugned orders of the Tribunal are perverse and bad in law?

Analysis:
1. The appellant, a registered dealer under the VAT Act, was assessed for the year 2006-07 and held liable to pay tax. A raid by the Excise Department led to a show-cause notice and reassessment proceedings. The reassessment order held the appellant liable for a significant amount. Appeals were made to the Deputy Commissioner and the Tribunal, which were dismissed. The appellant contended that the reassessment was solely based on the show-cause notice without independent investigation, citing similar cases where reassessment orders were set aside for this reason.

2. The appellant argued that the Tribunal erred in confirming the duty liability without proper consideration of the facts. They claimed to be engaged in job-work, not manufacturing, and highlighted agreements with customers specifying parts supply. The appellant's failure to provide third-party bills for parts purchase was used to allege tax evasion. The respondent, however, maintained that the authorities rightly found tax evasion based on evidence and rejected the job-work claim due to lack of supporting documentation.

3. The High Court noted concurrent findings of tax evasion by all authorities. It agreed with the Tribunal that the reassessment was not solely based on the show-cause notice, as the appellant had opportunities to present their case. The Court upheld the reassessment order, emphasizing the discrepancy in reported sales and actual production. Lack of evidence supporting job-work claims led to the dismissal of the appeal. The Court found no error in the Tribunal's decision and dismissed the tax appeal.

This detailed analysis covers the issues raised in the judgment, including the appellant's arguments, the respondent's counterpoints, and the High Court's final decision based on the facts and legal considerations presented.