2017 (7) TMI 1220 - HC - VAT and Sales Tax

Validity of assessment - best judgment assessment - whether the dealer had ozonised chemical treatment as alleged pursuant to the bills of purchase from a supplier at Kolkata? - Held that - On specific query as to whether documents pertaining to chemical treatment and ozonisation was placed before any of the authority, the learned counsel for the revisionist would answer in the negative, therefore, in my considered opinion, the assessing authority was justified in computing the purchase value of wheat; the difference between the purchase value of wheat and the sale value was four times which the dealer failed to justify before the Tribunal. Learned counsel for the revisionist has failed to point out any illegality, infirmity or perversity in the impugned order, therefore, no question of law arises. Revision dismissed.

Summary

Issues:
Assessment based on best judgment assessment under Section 3G of the Trade Tax Act, 1948; Rejection of total purchase value of wheat due to high difference between sales and purchase turnover; Failure to provide evidence of expenses incurred towards chemical treatment and ozonisation; Dispute regarding the composition of wheat; Claim for additional value incurred on chemical treatment and ozonisation; Benefit of Section 3-G of the Trade Tax Act, 1948 for sale of transformers to a Government Undertaking.

Analysis:
The judgment pertains to a revision related to the assessment year 2002-03 under the Trade Tax Act, 1948. The dealer, engaged in the business of chemically treated ozonised flour, was assessed based on best judgment assessment. The Tax assessing authority rejected the total purchase value of wheat due to a significant difference between sales and purchase turnover. The dealer contested the assessment, claiming that the goods sold were chemically treated, but failed to provide evidence of the expenses incurred towards chemical treatment and ozonisation. The Tribunal and appellate authorities noted the lack of documentation to support the claimed expenses, leading to the computation of wheat purchase value at an average price per quintal. The dealer's explanation and composition details were not accepted, resulting in the imposition of tax based on the average price.

Regarding the claim for additional value incurred on chemical treatment and ozonisation, the dealer argued that since Tax authorities had accepted the purchase of ozonised wheat, the value of chemical treatment expenses should have been added. However, the dealer failed to present any documents related to the chemical treatment and ozonisation expenses, justifying the assessing authority's decision to compute the purchase value of wheat based on available information. The judgment also addressed the issue of seeking the benefit of Section 3-G of the Trade Tax Act, 1948 for the sale of transformers to a Government Undertaking. The Tribunal had previously remitted the matter for limited review on chemical treatment and ozonisation, indicating that other issues had attained finality, and the revisionist had not challenged the Tribunal's order.

In conclusion, the Court dismissed the revision, stating that the learned counsel for the revisionist failed to demonstrate any legal errors in the impugned order. Therefore, the Court found no grounds for questioning the decision, leading to the dismissal of the revision without costs.