2016 (11) TMI 160 - HC - VAT and Sales Tax

Validity of assessment order - levy of additional amount of tax - quantum of purchase of material from the unregistered as well as registered dealers enhanced - Held that - The A.O. in the assessment order referred to the notice issued to the petitioner specifically indicating that based on the work order and G Schedule, the purchase of Gitty , Boulder , Morram and other construction material from unregistered dealers be enhanced by ₹ 3 lacs, to which no reply was filed and consequently the assessment order was passed. The Deputy Commissioner (Appeals) by merely observing that no casual connection between the nature of work and the imposed tax has been indicated, set aside the imposition, however, the Tax Board before whom the petitioner chose not to appear, restored the order passed by the A.O., after considering in detail the reasons given by the A.O. and which were further fortified by way of submissions based on record available before the Tax Board essentially on account of the fact that the amount of purchase from the unregistered dealers indicated were too low looking to the total amount of work undertaken by the petitioner - The findings recorded by the A.O. as well as the Tax Board, even after rectification of the amount as sought by the petitioner, essentially, do not give rise to any question of law in the present case as the same are findings of fact, which do not require any interference - revision petition dismissed.

Issues:
1. Assessment order challenged by petitioner for Assessment Year 2008-09.
2. Appeal filed by petitioner against assessment order.
3. Reduction of additions made by Assessing Officer by Deputy Commissioner (Appeals).
4. Appeal filed by respondents before Tax Board.
5. Decision of Tax Board on lack of appearance by petitioner.
6. Rectification application filed regarding purchase amount from unregistered dealers.
7. Acceptance of rectification application by Tax Board.
8. Justification of Tax Board's decision in accepting respondent's appeal.
9. Challenge to orders passed by Assessing Officer and Tax Board.
10. Review of material available on record by the Court.
11. Reasoning behind restoration of assessment order by Tax Board.
12. Findings of Assessing Officer and Tax Board not giving rise to any legal question.

Analysis:
1. The petitioner, a contractor, challenged the assessment order made by the Assessing Officer for the Assessment Year 2008-09, where the quantum of purchase of material from unregistered and registered dealers was disputed, resulting in the imposition of tax at 12%.

2. The petitioner filed an appeal against the assessment order, leading to the Deputy Commissioner (Appeals) reducing the additions made by the Assessing Officer. The Deputy Commissioner observed a lack of nexus between the project work and the additional tax imposed, along with the absence of a specific notice prior to the levy.

3. Subsequently, the respondents filed an appeal before the Tax Board, which decided the matter ex parte due to the petitioner's non-appearance. The Tax Board overturned the Deputy Commissioner's decision, stating that the connection between the nature of work and the tax was justified based on facts, specifically mentioning the petitioner's road construction work and low purchase amounts from unregistered dealers.

4. A rectification application was filed to correct the purchase amount from unregistered dealers, which the Tax Board partially accepted, citing provisions of the Act for rejecting the rest of the rectifications.

5. The petitioner contested the Tax Board's decision, arguing that the orders by the Assessing Officer and Tax Board were based on assumption and presumption, lacking justification and warranting interference.

6. The Court reviewed the submissions and material on record, noting the Assessing Officer's notice to enhance purchases from unregistered dealers based on work order and 'G' Schedule, with no response from the petitioner, leading to the assessment order.

7. The Court upheld the Tax Board's decision to restore the assessment order, emphasizing the detailed reasons provided by the Assessing Officer and supported by the record, especially considering the low purchase amounts in relation to the total work undertaken by the petitioner.

8. Ultimately, the Court found no legal question arising from the findings of the Assessing Officer and Tax Board, leading to the dismissal of the revision petition.

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