2015 (5) TMI 377 - HC - VAT and Sales Tax

Denial of request of adjournment for production of Books of Accounts - Held that - Court finds that the reason stated by the petitioner for granting adjournment for producing the Books of Accounts was turned down, saying that it was a 'false reason', in view of the extent of turn over for the year 2012-13; for which no audit was necessary and hence not acceptable. The learned Counsel for the petitioner points out that the petitioner being a Company incorporated under the relevant provisions of the Companies Act, audit of accounts was very much necessary and denial of opportunity is totally against the principles of natural justice. - Matter remanded back on the condition of pre deposit - Decided conditionally in favour of assessee.

Summary

Issues: Challenge to assessment order, denial of adjournment for production of Books of Accounts, appeal to appellate authority, purchase and sales suppression, necessity of audit of accounts, principles of natural justice, opportunity to produce Books of Accounts, deposit for re-consideration of matter, interception by Court affecting appeal.

In this case, the petitioner challenged the assessment order (Ext.P3) imposing a liability of Rs. 6,65,047. The petitioner requested an adjournment to produce Books of Accounts, but it was denied, leading to the finalization of the assessment. The petitioner contended that the assessment was arbitrary and wrong, prompting the challenge. The Government Pleader highlighted instances of purchase and sales suppression as discussed in Ext.P3. The petitioner argued that the Books of Accounts, crucial for clarifying the factual position, were unavailable as they were in the audit office at Kottakkal, justifying the adjournment request.

During the hearing, the Court found that the denial of adjournment based on the reason provided by the petitioner was unjustified. The petitioner, being a Company under the Companies Act, stressed the necessity of audit, claiming denial of natural justice. The Court directed the petitioner to deposit Rs. 1.5 lakhs within ten days for reconsideration by the Commercial Tax Officer, setting aside Ext.P3. The officer was instructed to re-examine the matter after allowing the production of Books of Accounts and hearing the petitioner, with a deadline of six weeks from the judgment's receipt.

Regarding the appeal filed by the petitioner before the appellate authority (Ext.P2), the Court deemed it redundant due to the reassessment directed in the primary case. Consequently, the appeal did not require further action. Both matters were disposed of accordingly, with the interception by the Court impacting the appellate proceedings.