2017 (1) TMI 126 - HC - VAT and Sales Tax

Revision of turnover - reversal of input tax credit - discrepancies and errors found in records - Held that - the Assessing Officer did not made any endeavour to direct the petitioner to produce those documents, infact in the earlier Writ Petitions, the direction was to the said effect by directing the Assessing Officer to direct the petitioner to produce the account books and the Assessing Officer to look into the objections as well as the documentary evidence. Therefore, the correct procedure that should have been adopted by the first respondent is to direct the petitioner to produce the books of accounts and other details and then find out as to whether the objection raised by the petitioner is sustainable or not. This having not been done, is sufficient to send back the matter for redoing the matter. On notice being sent to the dealer, if the dealer files his objections, then it is for the Assessing Officer to independently apply his mind to the objections and then rule on the objections. While doing so, the Assessing Officer cannot state that he has been directed by the Inspecting Officer to implement a proposal, if this is done then it would amount to clear abdication of the statutory duties of the Assessing Officer. This is also one more reason to remit the matter to set aside the impugned order and remit the matter to the Assessing Officer for fresh consideration. Petition allowed - matter on remand.

Summary

Issues:
Challenge to assessment orders for the years 2007-08 to 2009-10, discrepancies in inspection report, objections filed by petitioner, consideration of objections by the first respondent, influence of inspection report on Assessing Officer, abdication of statutory duties by Assessing Officer.

Analysis:
The petitioner, a partnership firm engaged in civil construction works, challenged assessment orders for 2007-08 to 2009-10 due to discrepancies in the inspection report by Enforcement Wing officials. The first respondent issued notices proposing to revise turnover and reverse input tax credit, along with levying penalties. The petitioner submitted objections, highlighting similar assessments for subsequent years challenged in earlier writ petitions. The first respondent completed assessment despite objections, prompting a review of the process.

The High Court examined whether the first respondent effectively considered the objections and previous court directions related to identical turnover assessments. It noted the Assessing Officer's failure to request necessary documents from the petitioner, as directed in previous writ petitions. The court emphasized the importance of following correct procedures and ensuring a fair review of objections before finalizing assessments.

Another crucial aspect highlighted was the Assessing Officer's reliance solely on the inspection report, disregarding independent assessment. The court stressed the Assessing Officer's statutory duty to assess independently, cautioning against being influenced solely by inspection team observations. This lack of independent assessment was deemed a reason for remitting the matter back for fresh consideration.

The court emphasized that upon receiving objections from the dealer, the Assessing Officer must independently evaluate them without being directed by the inspection team. Failure to do so would constitute a dereliction of statutory duties. This further supported the decision to set aside the impugned orders and remand the matter for a thorough reassessment in accordance with the law.

In conclusion, the High Court allowed the writ petitions, set aside the assessment orders, and remanded the matter to the first respondent for a fresh assessment. The first respondent was directed to ensure the petitioner provides necessary documents and thoroughly consider objections during a personal hearing, emphasizing the need for an independent assessment process. No costs were awarded, and connected Miscellaneous Petitions were closed.