2020 (3) TMI 1256 - HC - VAT and Sales Tax

Best Judgement Assessment - KVAT Act - reason for completing the assessment on best of judgment basis is that the petitioner had failed to produce the audited statement along with the returns - HELD THAT - In view of the limited relief sought and in the light of Exhibit P2- Division Bench judgment of this Court, the writ petition is disposed of directing the first respondent to consider Exhibit P4-rectification application and to pass a reasoned order thereon - In the meanwhile, recovery proceedings pursuant to Exhibit P1-order shall be kept in abeyance. Petition disposed off.

Summary

Issues:
1. Assessment on best of judgment basis due to failure to produce audited statement along with returns under KVAT Act.
2. Interpretation of Section 25(1) of the KVAT Act regarding submission of audited statements.
3. Pending rectification petition and its consideration by the authorities.
4. Relief sought in the writ petition and the direction provided by the Court.

The judgment pertains to a petitioner aggrieved by a best of judgment assessment order under the KVAT Act for the year 2015-16 due to the failure to submit audited statements along with the returns. The petitioner argued that Section 25(1) of the KVAT Act does not mandate the submission of audited statements with returns, citing a Division Bench judgment. The Court considered the petitioner's submission and directed the first respondent to review the rectification application (Exhibit P4) and issue a reasoned order, in line with the Division Bench judgment. Recovery proceedings based on the assessment order were ordered to be suspended until the rectification application is decided.

The main issue revolved around the interpretation of Section 25(1) of the KVAT Act concerning the necessity of submitting audited statements with returns for assessment purposes. The petitioner contended that the absence of audited statements should not warrant a best of judgment assessment, relying on a Division Bench judgment that supported this argument. The Court, acknowledging the petitioner's stance and the precedent set by the Division Bench, directed the authorities to consider the rectification application and provide a reasoned decision, aligning with the previous judgment.

Another significant aspect of the case was the pending rectification petition (Exhibit P4) filed by the petitioner, indicating that the audited statement was indeed available. The Court took note of this submission and directed the first respondent to evaluate the rectification application promptly and issue a well-founded decision. This highlighted the importance of due process and the right of the petitioner to rectify any discrepancies in the assessment process.

The judgment provided a limited but crucial relief to the petitioner by instructing the authorities to review the rectification application and suspend recovery proceedings linked to the best of judgment assessment order until a decision is made. This decision showcased the Court's commitment to ensuring fair treatment and adherence to legal principles, as evidenced by the reliance on previous judgments to guide the resolution of the current dispute.