2016 (3) TMI 693 - HC - VAT and Sales Tax

Rectification petition - Re-determination of total and taxable turnover - Suppression of turnover as three different figures on three different dates were furnished - Opportunity of personal hearing not provided before taking note of original record, hence, violation of principles of natural justice and perversity of finding - Held that - the Tribunal had not violated any principle of natural justice as it was the assessee, who invited the attention of the Tribunal to the balance sheet. The Tribunal was not supposed to get into the document and confront the revision petitioner with the discrepancies between the figures found in the balance sheet and what was furnished to the Team of Enforcement Wing. Once a party before a quasi judicial Tribunal, voluntarily invites the attention of the Tribunal to a document, the Tribunal is entitled to come to its own conclusion from what was produced. It is not part of the principles of natural justice to expect the Tribunal to confront the person producing the document with what is found by the Tribunal. Therefore, there is not any violation of principles of natural justice. For the grievance relating to perversity of findings, it is necessary to take note of the 3 grounds with which the petitioner has gone before the Tribunal seeking rectification. If we compare the grounds of attack in these revision petitions with the paragraphs from the rectification petitions, which have extracted, it could be seen that primarily the attack on perversity of finding, revolves around the 3 facts. So, the revision petitioner should in all fairness pursue the rectification petitions and get verdict on the same. Assuming that the Tribunal rejects the petitions for rectification, it is not as though the petitioner is without a remedy. Assuming that the Tribunal allows the rectification petitions, but sustains the findings, even then, the doors are not shut for the assessee. If the rectification petitions are allowed, but the ultimate conclusion is sustained, the reasoning and the conclusion may not go in tandem. Therefore, The question of perversity cannot be examined at this stage when the petitions for rectification are pending from 2014. - Petition disposed of

Summary

Issues:
1. Assessment of sales turnover and raw material consumption for multiple years.
2. Allegations of suppression of turnover leading to revised assessment and penalty.
3. Appeal against revised assessment allowed by Deputy Commissioner but reversed by Tribunal.
4. Questions of law raised in Tax Case Revisions regarding natural justice, errors of law, findings of fact, and restoration of penalty.
5. Pending rectification petitions before the Tribunal challenging findings.

Analysis:

Issue 1: Assessment of sales turnover and raw material consumption
The Tax Case Revisions were filed challenging the correctness of the order passed by the Tamil Nadu Sales Tax Appellate Tribunal regarding the assessment of sales turnover and raw material consumption for the years 1994-95 to 1997-98. The discrepancies in figures provided by the assessee led to the Assessing Officer concluding suppression of turnover, resulting in revised assessments and imposition of penalties.

Issue 2: Allegations of suppression of turnover
The Assessing Officer issued notices proposing revised assessments based on the discrepancies in figures provided by the assessee. The Deputy Commissioner allowed the appeals against the revised orders, but the Tribunal later reversed these decisions, leading to the filing of Tax Case Revisions by the assessee raising questions of law regarding natural justice, errors in the inference of suppressed sales, findings of fact, and restoration of penalty.

Issue 3: Appeal process and Tribunal's decision
The appeals filed by the assessee against the revised assessments were initially allowed by the Deputy Commissioner but overturned by the Tribunal in a common order. This reversal prompted the assessee to file Tax Case Revisions questioning the Tribunal's decision and raising specific legal issues for consideration.

Issue 4: Questions of law raised in Tax Case Revisions
The Tax Case Revisions raised four main questions of law, including the violation of natural justice, errors in the inference of suppressed sales, perversity in findings, and the legality of restoring penalties. The Tribunal's decision was challenged on grounds of procedural fairness, legal errors, and the adequacy of the findings made.

Issue 5: Pending rectification petitions
The assessee also filed rectification petitions before the Tribunal seeking corrections in the findings related to stock quantities and raw material consumption. The High Court emphasized the importance of pursuing these rectification petitions to address the alleged errors and discrepancies before further legal challenges could be considered. The Court directed the Tribunal to dispose of the rectification petitions within a specified timeframe to ensure procedural fairness and proper consideration of the issues raised.

Overall, the judgment highlighted the importance of addressing discrepancies in figures, pursuing rectifications for factual errors, and ensuring procedural fairness in tax assessments and appeals processes.