2019 (10) TMI 1321 - HC - VAT and Sales Tax

Revision of assessment - purchase omission - purchases of cigarettes made from Valli and Sons were not accounted by the dealer - HELD THAT - Even though the petitioner has raised the objections and pointed out the seller could not affirm with materials, it was sold to the petitioner, it was not considered by the respondent. The authority proceeded on the basis that the seller has proved the cash purchase made by the petitioner. On the other hand, the fact remains that there are no substantiating materials to prove the same. In the absence of proof of purchase made by the petitioner, the purchase omissions attributed to the petitioner based on the inspection report cannot be sustained. The respondent has not discussed the issue of the lack of evidence, but held that the report of the Enforcement Wing is unassailable. Such an approach, without evidence of purchase omission, leads this court to infer that the order passed by the authority is perverse and illegal. Therefore, the revised assessment made by the respondent are set aside as not sustainable in the eyes of law - Petition allowed.

Summary

Issues:
Challenge to revision orders for assessment years 2010-11 and 2011-12 based on surprise inspection leading to purchase omissions. Lack of evidence and legality of revised assessments.

Analysis:
The revision orders for the assessment years 2010-11 and 2011-12 were challenged in the writ petitions due to a surprise inspection by Enforcement Wing Officers, revealing purchase omissions by the dealer. The turnover for 2010-11 was redetermined at ?86,55,782/- with a penalty, and for 2011-12 at ?60,77,621/- with penalties. The core issue revolved around the Enforcement Wing report and the Assessment Officer's inquiry into alleged purchase omissions from a specific seller, Valli and Sons. The Partner of Valli and Sons failed to provide concrete evidence that the goods were solely sold to the petitioner, raising doubts about the authenticity of the purchase omission claims. The petitioner's objections regarding lack of proof of purchase were disregarded by the respondent, leading to a flawed assessment process.

The respondent's failure to address the lack of evidence and reliance solely on the Enforcement Wing report was deemed unacceptable by the court. The court concluded that the order based on unsubstantiated purchase omissions was legally flawed and overturned the revised assessments for both years. Consequently, the court directed the respondent to refund any amounts collected under the revised assessments within eight weeks. The writ petitions were allowed, and no costs were imposed. Additionally, the Special Government Pleader was entitled to a separate fee for each writ petition.