2015 (5) TMI 530 - HC - VAT and Sales Tax

Stock transfer to Calcutta - Levy of tax on DEPB licences in Calcutta - Held that - On perusal of the impugned order, it is seen that the Assessing Officer is solely guided by the proposal given by the Enforcement Wing Officers and there is no independent application of mind by the Assessing Officer, while assessing the petitioner's returns. Hence, the impugned proceedings are held to be bad in law. Furthermore, the contention that no penalty is leviable, was specifically raised by the petitioner, since the assessments were completed by taking materials from the books of account produced by the petitioner. In such circumstances, the question of levy of penalty does not arise and the fundamental aspect has also been ignored by the Assessing Officer. Therefore, the petitioner is entitled to succeed. - Decided in favour of assessee.

Summary

Issues:
Challenging assessment orders under CST Act for assessment years 1998-1999 to 2001-2002.

Analysis:
The petitioner, a registered dealer under TNGST and CST Acts, challenged assessment orders for four years. The Special Committee set aside the orders and remanded the matter for fresh consideration. The petitioner provided relevant documents and objections. The Assessing Officer passed new orders, which were again challenged by the petitioner. The High Court set aside the orders and remanded the matter once more.

The petitioner submitted detailed objections, requested a personal hearing, and argued against penalty imposition based on previous court decisions and circulars. Despite the petitioner's submissions, the Assessing Officer relied on a statement from Enforcement Wing Officers without independent assessment. The High Court found the proceedings to be legally flawed due to lack of independent application of mind by the Assessing Officer.

The High Court held that the Assessing Officer's reliance on the Enforcement Wing Officers' proposal without independent assessment was improper. The failure to consider the petitioner's argument against penalty imposition based on book of account materials was also noted. Consequently, the High Court allowed the writ petitions, quashed the assessment orders, and remanded the matter for fresh consideration with a directive to provide a personal hearing, consider all materials, and pass a reasoned order in accordance with the law.

In conclusion, the High Court's judgment focused on the lack of independent assessment by the Assessing Officer, improper reliance on external proposals, and failure to consider the petitioner's arguments against penalty imposition. The court emphasized the need for a fair and reasoned assessment process, leading to the quashing of the assessment orders and a remand for fresh consideration with specific instructions for a personal hearing and proper evaluation of all relevant materials.