2016 (1) TMI 188 - HC - VAT and Sales Tax

Levy of tax - Discrepancy in stock - Held that - There was a surprise inspection conducted on 29.03.2010 by the Enforcement Wing Authorities, during which various records were recovered. On 12.04.2014, after four years, a notice came to be issued proposing levy of tax and penalty with a further direction to submit explanation apart from directing the petitioner to produce photo copies of certain documents in order to get the seized documents. Accordingly, on 26.05.2014, the petitioner by enclosing the documents required by the respondent requested them to furnish copies of the recovered records for the purpose of filing necessary objections, followed by a letter dated 21.07.2014 requesting necessary alteration to be made in the certificate of registration pursuant to the shifting of place of business. Thereafter, without affording any opportunity, on 31.07.2015, the impugned order came to be passed. It is the specific case of the petitioner that despite the receipt of copies of documents as required by the respondent, without returning the seized documents, even after the receipt of the objections filed by the petitioner, the impugned order came to be passed, as if the petitioner did not respond to the notice - Additional Government Pleader (Taxes) for the respondent, after verification of the assessment records fairly submitted that the respondent, inadvertently, failed to consider the documents produced by the petitioner. - Matter remanded back.

Summary

Issues:
Challenge to order of respondent issued in TIN No. 33592123679/2009-10 dated 31.07.2015 and direction to furnish copies of records recovered through Form VSI-5 dated 29.03.2010.

Analysis:
The writ petition challenges the respondent's order dated 31.07.2015 regarding the shifting of the petitioner's business premises and the recovery of records during an inspection on 29.03.2010. The petitioner, a registered dealer in Gutka and Sodium Benzoate, shifted their business location twice, notifying the respondent each time. The enforcement authorities found discrepancies during the inspection, leading to a tax payment by the petitioner. Despite requests for copies of the seized documents, the respondent issued a pre-revision notice in 2014, followed by the impugned order in 2015 without considering the documents submitted by the petitioner. The petitioner argued that the order was passed without proper explanation or opportunity to respond, highlighting procedural irregularities and non-compliance with document requests.

Analysis:
The petitioner's contention includes the failure of the respondent to provide copies of the recovered records for filing objections, as requested by the petitioner. The respondent's actions, such as issuing a notice proposing tax and penalty after four years of the inspection, not considering the documents submitted by the petitioner, and passing the impugned order without affording an opportunity to respond, were challenged as unjust. The petitioner's request for setting aside the impugned order was based on the respondent's failure to return the seized documents, consider the objections filed, and provide copies of the submitted documents for review. The court noted the inadvertent failure of the respondent to consider the petitioner's documents, leading to the setting aside of the impugned order and a direction to furnish xerox copies of the seized documents within two weeks for filing necessary objections and subsequent orders based on merit and law.

Analysis:
The High Court, after considering the arguments presented, set aside the impugned order dated 31.07.2015 and directed the respondent to provide xerox copies of the seized documents within two weeks for the petitioner to file objections. The petitioner was instructed to submit necessary objections within two weeks of receiving the copies, followed by the respondent passing orders based on merit and law within six weeks, after providing an opportunity for the petitioner to be heard. The writ petition was disposed of with these directions, without any costs, and the connected miscellaneous petition was closed, resolving the issues raised by the petitioner effectively.