2015 (4) TMI 1345 - HC - VAT and Sales Tax

Violation of principles of natural justice - cross-examination of witnesses - low turnover reported - whether the Sales Tax Appellate Tribunal is correct in accepting the extracts obtained from the check posts without any corroborative evidence in support thereafter? - Whether the Sales Tax Appellate Tribunal is correct in forming the estimation of turnovers with reference to sales with no corresponding consumption of power (electricity in the manufacturing premises of the dealer) and as to denial of opportunity for cross-examination of witnesses? HELD THAT - The cross-examination is not as of right for even no worth material placed much less any case made out to afford opportunity in cross-examination to elicit any material required for consideration. In fact, from the questions of law, claimed there is no question of law involved practically. No doubt so far as the estimation of turnovers on the basis of consumption of electricity is concerned, it is only one of the permissible modes and that too when there is no other evidence and only on showing there is any direct nexus between the consumption of electricity and the turn over, without which that cannot be taken as a basis as held by this Court in Venkata Ramana Stone Crushers Co., V. State of Andhra Pradesh 2010 (9) TMI 1095 - ANDHRA PRADESH HIGH COURT . The assessing authority when taken every possible means to prove the nature of transactions and there were suppression of the estimated turnovers by Nil return or by return showing absolutely low turn over and the same was detected on cross verification from the extracts of the check post and also information from the banks and purchasing dealers which are very clearly discussed in corroboration of one to the other to substantiate with reasons to the best judgment assessment, that too after supply of all the copies and even when the assessee (revision petitioner) failed to deny any of the transactions through the books of accounts, weigh bills and other documentary evidence, but for by a stray sentence of all are as if fake or untrue, that is not suffice. Further more, the assessee who obtained weigh bills from the assessing authority failed to produce the triplicate copies and render account for its use when called for and came up with a plea of records destroyed as if in a fire accident with no any basis even to say muchless to substantiate. The assessment order clearly speaks with reasons that was confirmed by the Appellate Deputy Commissioner of said version is untrue from the recorded evidence, but intentionally for evasion of tax by filing Nil returns or returns with utterly low turnover, there is for this Court while sitting in revision against the impugned order of the Sales Tax Appellate Tribunal in the two respective revisions nothing to interfere. Revision dismissed.

Summary

Issues:
1) Challenge to assessment orders for the assessment years 1992-93 and 1993-94 under the Andhra Pradesh General Sales Tax Act, 1957.
2) Validity of best judgment assessment and tax liability determination.
3) Acceptance of evidence obtained from check posts without corroborative evidence.
4) Estimation of turnovers based on electricity consumption without direct nexus.
5) Denial of opportunity for cross-examination of witnesses.

Analysis:
1) The petitioner, a dealer in Sunflower Seed, Sunflower Oil, and Sunflower Cake, challenged the assessment orders for the years 1992-93 and 1993-94 under the APGST Act. The assessment revealed discrepancies in reported turnover leading to best judgment assessments for tax liabilities.
2) The best judgment assessments were based on detected escaped turnover, with the petitioner failing to provide adequate records due to a claimed fire accident. The tax liability was determined after considering objections and evidence, resulting in demands for unpaid taxes.
3) The issue of accepting evidence from check posts without corroborative evidence was raised. The Court emphasized the assessing authority's efforts to establish transactions through various sources, including check posts, banks, and purchasing dealers. The petitioner's unsubstantiated claims of transactions being fake or untrue were deemed insufficient to refute the assessment.
4) Regarding turnover estimation based on electricity consumption, the Court clarified that such estimation requires a direct nexus between electricity usage and turnover. Without substantial evidence supporting this link, the estimation method was considered invalid.
5) The petitioner raised concerns about the denial of the opportunity for cross-examination of witnesses. The Court ruled that cross-examination is not an absolute right and must be justified by the material presented. In this case, no significant material warranted cross-examination, leading to the dismissal of this argument.
6) Ultimately, the Court upheld the Sales Tax Appellate Tribunal's orders, finding no legal errors in the assessment process or the decision-making. Both revisions were dismissed, and any pending petitions in the case were closed without costs.