2019 (4) TMI 2033 - HC - VAT and Sales Tax

Validity of assessment order - suppression of turnover - TNGST Act - HELD THAT - The Tribunal while reversing the order, committed a serious error in stating that when notices were issued to the persons who have obtained quotation, they did not appear and did not give any reply either accepting that they have purchased material from the petitioner or denied having purchased material from the petitioner, therefore concluded that the quotations have fructified into sale. The finding rendered by the Tribunal is absolutely incorrect and the finding referred by the First Appellate Authority is fully justified and there were no grounds to reverse such a finding. The order passed by the Tribunal is set aside and the order passed by the First Appellate Authority is restored - Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenging orders of Tamil Nadu Sales Tax Appellate Tribunal regarding assessment for 1997-98, 1998-99, and 1999-00 under Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The petitioner filed writ petitions challenging the orders of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) Coimbatore related to assessments for the years 1997-98, 1998-99, and 1999-00 under the Tamil Nadu General Sales Tax Act, 1959. The Assessment Officer had found that the petitioner had suppressed turnover as they could not provide evidence to support entries in quotations. The Tribunal had reversed the order, claiming that the quotations had turned into sales as the persons who obtained the quotations did not respond to notices. However, the High Court found this conclusion to be incorrect and upheld the findings of the First Appellate Authority, which had set aside the assessment due to lack of evidence of actual sales transactions.

The Assessment Officer had directed the assessee to prove a negative, which was deemed inappropriate by the High Court. The Appellate Authority correctly analyzed the factual situation and allowed the appeal. The High Court referred to the findings of the Appellate Authority, which highlighted discrepancies in the entries and lack of evidence of actual sales transactions. The High Court emphasized that the Assessment Officer's stance was not acceptable, as there was no concrete evidence of sales, leading to the decision to set aside the assessment.

The Tribunal's decision to reverse the order was based on the absence of responses from individuals who obtained quotations. However, the High Court deemed this reasoning flawed and found that the Tribunal had erred in concluding that the quotations had resulted in sales without sufficient evidence. The High Court upheld the decision of the First Appellate Authority, which had correctly set aside the assessment due to the lack of proof of actual sales transactions. Consequently, the High Court allowed the writ petitions, set aside the Tribunal's order, and restored the order of the First Appellate Authority, with no costs incurred.