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2017 (5) TMI 1060 - HC - VAT and Sales TaxLegality of assessment order - works contract - Section 38 - Held that - since on previous occasion the petitioner had not responded to the notice served by the department, this court directs the petitioner to appear before the Revenue Department along with the books of accounts, and other related documents, on 27-03-2017 - assessment order dated 11-04-2016 is hereby set aside - matter allowed by way of remand.
Issues:
Challenge to the legality of assessment order dated 11-04-2016 by the Deputy Commissioner of Commercial Taxes. Interpretation of tax assessment period under the Act. Failure of the petitioner to produce books of accounts leading to anomalies in tax liability calculation. Analysis: The petitioner, a Private Limited Company engaged in interior works contract, challenged the assessment order directing payment of ?31,60,784 to the Revenue Department. The petitioner contended that tax assessment period is a calendar month, not a year. The Revenue Department discovered anomalies in tax returns due to discrepancies in turnover declarations and purchases. Despite multiple notices, the petitioner failed to produce books of accounts, resulting in the assessment order. The learned counsel for the petitioner argued that the assessment should not cover a full year but be limited to a calendar month, citing a relevant case. The Revenue's counsel did not contest this point, acknowledging the error in assessing tax liability over twelve months. The court directed the petitioner to appear before the Revenue Department with documents for re-examination. The Revenue Department would issue a notice if anomalies persist, allowing the petitioner a hearing before passing an assessment order. Given the reasonable stance of the Revenue's counsel and the petitioner's previous non-compliance, the court set aside the assessment order and remanded the case to the Commercial Taxes department. The petitioner was instructed to cooperate in the re-examination process, with the Revenue Department free to issue a new assessment order if necessary. The petitioner retained the right to challenge any new assessment order. The writ petitions were allowed, and the assessment order dated 11-04-2016 was overturned.
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