2017 (6) TMI 357 - HC - VAT and Sales Tax

Shortage of stock - principles of natural justice - Held that - The Court finds that this is virtually the third tier of appeal after the assessment order. The Court finds that in the memo of appeal, the Appellant has not set out precisely which document, according to it, which was already on record before the authorities below was not considered by it and, if considered, would have altered the decision in the appeal before the AT. Nowhere in the memo of appeal is it averred that such documents despite being produced were overlooked by the OHA and the AT, the Court is not inclined to grant any more indulgence to the Appellant. Further, if indeed there were any such documents, they should have been described in the memo of appeal and copies thereof enclosed. That has not been done. The impugned order of the AT does not suffer from any legal infirmity - appeal dismissed - decided against appellant.

Summary

Issues:
Appeals filed under Section 81 of the Delhi Value Added Tax Act, 2004 against the order of the Appellate Tribunal, Value Added Tax; Alleged shortage in stock and cash leading to notices under Sections 59(2), 32, and 33 of the DVAT Act; Objections filed before the Objection Hearing Authority; Appeals dismissed by the Appellate Tribunal; Failure to produce documentary evidence to contradict survey findings; Disputed explanations regarding stock variations and cash shortage.

Analysis:
The appeals were filed by the Assessee against the order of the Appellate Tribunal, Value Added Tax, related to a survey conducted by the Enforcement Branch, Department of Trade & Taxes, revealing a shortage in stock and cash. The Appellant, a partnership firm dealing with sanitary goods, was issued notices under Sections 59(2), 32, and 33 of the DVAT Act based on the survey findings. The Objection Hearing Authority disposed of the objections, rejecting revisions to the trading account and explanations for alleged stock shortages and cash discrepancies.

The Appellant then appealed to the Appellate Tribunal, which upheld the earlier decisions, citing the Appellant's failure to produce documentary evidence to counter the survey team's findings. The Tribunal found the explanations provided were afterthoughts to evade tax liability and disallowed claims regarding stock variations and job work. The Tribunal also rejected the explanation for the alleged cash kept for medical expenses, stating it was unacceptable due to lack of proof.

During the appeal before the High Court, the Appellant argued that documentary evidence was submitted, including books of accounts, purchase bills, and medical records, but the Court found the Appellant failed to specify which documents were overlooked by the lower authorities. The Court noted that the Tribunal's findings on stock and cash variations remained uncontroverted, leading to the dismissal of the appeals. The Court held that the Tribunal's order was legally sound, and no substantial question of law arose, resulting in the dismissal of the appeals without costs.