2017 (1) TMI 1345 - HC - VAT and Sales Tax

Violation of principles of natural justice - Two notices were issued with the proposal to assess six machines, two of which were primary crushers, two secondary crushers of size (iii), one secondary crusher of size (ii) and a cone crusher - Held that - The petitioner admits in the reply dated 24.10.2016, as extracted in the order, that the petitioner initially installed one primary crusher and two secondary ones and later installed a cone crusher without enhancing the production capacity. The compounding as permitted is not based on the production and is for the machines installed and the petitioner s contentions works against himself. When, for all practical purposes, it is admitted that deviation is existing in so far as the machinery installed and operating, from that originally declared for the purposes of compounding; there is no explanation offered as to why, on fresh installation, the same was not brought to the notice of the Assessing Officer - Petition dismissed.

Summary

Issues:
Assessment orders for the assessment years 2011-2014, Violation of principles of natural justice, Consideration of information gathered by various authorities, Deviation from compounding application, Admissibility of fixed asset schedule in assessment.

Analysis:

The petitioner challenged assessment orders for the years 2011-2014, arguing that the Assessing Officer considered six machines in the assessment despite the compounding application mentioning only two crushers. The Court noted that factual aspects like the number of crushers are beyond its purview under Article 226 of the Constitution. However, the petitioner alleged a violation of natural justice due to the Assessing Officer's change in grounds without prior notice.

The notices issued proposed assessing six machines, including primary and secondary crushers. The petitioner had initially declared only two crushers for compounding purposes. The Pollution Control Board's permits indicated the installation of additional crushers beyond what was declared. The Assessing Officer exempted some crushers based on the fixed asset schedule provided by the petitioner.

The violation of natural justice was contested concerning the Assessing Officer's failure to mention information gathered by the Accountant General. The Court held that as long as the permits and accounts showed deviations from the compounding declaration, the Assessing Officer's actions were justified, and no violation of natural justice occurred.

The Assessing Officer relied on documents provided by the petitioner, including the fixed asset schedule, in making the assessment. The petitioner's response to the assessment order acknowledged the deviation from the initially declared machinery. The Court found no grounds to interfere with the assessment order under Article 226 and directed the petitioner to seek remedy through proper proceedings before the Appellate Authority.

In conclusion, the Court dismissed the writ petition, allowing the petitioner to file an appeal before the Appellate Authority within two weeks. The Appellate Authority was instructed to consider the appeal without being influenced by the Court's observations. Recovery of any dues was to be stayed for a month pending the appeal outcome.