2015 (11) TMI 1389 - HC - VAT and Sales Tax

Application for rectification - Imposition of tax including penalty under Sections 61 and 55 of the Rajasthan Value Added Tax Act, 2003 - Held that - it may be observed that the order rejecting the rectification application cannot be faulted because the order dated 07.03.2014 with respect to which rectification application was filed, because the cited judgment in CTO Circle-B, Udaipur Vs. M/s Rajesh R Bhosle (New Delhi) was of the Tax Board itself and not of the jurisdictional High Court or the Supreme Court. Besides the demand of tax was not based on the information procured only from Internet. Department also claimed to have procured the required information also from M/s Maruti Suzuki India Limited. The Tax Board cannot therefore be held to have committed any illegality in rejecting the application for rectification. - The findings recorded by the Tax Board need not be interfered with, but if the Tax Board was persuaded to remand the matter to the CTO for deciding all the issues afresh rather than on one and single issue on which the matter was remanded by the Deputy Commissioner (Appeals) - Decided partly in favour of assessee.

Issues Involved:
1. Legality of the Rajasthan Tax Board's order to remand the matter to the Commercial Taxes Officer (CTO).
2. Alleged bias of the CTO in handling the case.
3. Validity of the assessment and penalty imposed under Sections 61 and 55 of the Rajasthan Value Added Tax Act, 2003.
4. Adequacy of the evidence and procedure followed in the assessment process.
5. The appropriateness of the Rajasthan Tax Board's refusal to rectify its previous order.

Issue-wise Detailed Analysis:

1. Legality of the Rajasthan Tax Board's Order to Remand the Matter to the CTO:
The petitioner, M/s Ajmer Auto Agencies Private Limited, challenged the remand order by the Rajasthan Tax Board, arguing that the Board should have passed a fresh order of assessment itself rather than remanding the matter to the CTO. The petitioner contended that the remand was only for considering the amount of discount out of the remitted tax evasion amount. The court observed that the Tax Board affirmed the order of the Deputy Commissioner (Appeals) but remanded the entire matter to the CTO for a fresh order after providing an opportunity of hearing to the petitioner. The court found no justification for the Tax Board to record findings against the petitioner when remanding the matter on all issues.

2. Alleged Bias of the CTO in Handling the Case:
The petitioner argued that the CTO, who prepared the anti-evasion case, was biased and should not have handled the remand. The court noted that the petitioner cited judgments to support the claim of bias, including the prosecutor-judge theory. However, the respondent argued that the matter had been transferred to another CTO, eliminating any bias concerns. The court directed that a fresh order be passed by the CTO on all issues, ensuring that the assessing authority decides the matter without being influenced by previous findings.

3. Validity of the Assessment and Penalty Imposed under Sections 61 and 55 of the Rajasthan Value Added Tax Act, 2003:
The CTO imposed tax and penalty under Sections 61 and 55 of the Act based on the Dealer Management System register, which allegedly did not cover discounts and bonuses. The petitioner challenged the validity of this assessment, arguing that the CTO's order was based on incomplete information. The court directed the CTO to pass a fresh order after considering all arguments and evidence presented by the petitioner.

4. Adequacy of the Evidence and Procedure Followed in the Assessment Process:
The petitioner contended that the ex-parte audit report was submitted without obtaining any clarification from the petitioner or M/s Maruti Suzuki India Limited. The petitioner argued that the documents obtained from the Internet could not be relied upon unless proved by the concerned authority. The court noted that the Tax Board's decision was based on information from M/s Maruti Suzuki India Limited and not solely on Internet data. The court directed the CTO to reassess the matter, ensuring all evidence and procedural requirements are adequately addressed.

5. The Appropriateness of the Rajasthan Tax Board's Refusal to Rectify Its Previous Order:
The petitioner argued that the Tax Board's refusal to rectify its order was unjustified and that the order suffered from apparent mistakes. The court found that the order rejecting the rectification application could not be faulted, as the cited judgment was not from the jurisdictional High Court or the Supreme Court. The court upheld the Tax Board's decision to reject the rectification application but set aside the findings in paragraphs 6 to 10 of the Tax Board's order.

Conclusion:
The court allowed the revision petitions in part, directing the Commercial Taxes Officer, Anti-Evasion, Ajmer, to pass a fresh order after providing an opportunity of hearing to the petitioner. The CTO is to decide the matter in accordance with the law, without being influenced by previous observations or findings.

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