2017 (9) TMI 325 - HC - VAT and Sales Tax

Validity of assessment order - Central Sales Tax Act, 1956 - The respondent has doubted the transactions done by the petitioner, suspecting it to be bill trading . Therefore, the respondent has insisted upon the proof to show movement of goods - Held that - When the petitioner has taken a stand that they do not maintain any log book / trip sheets for local movement and they use their own vehicles for movement of goods and as per the trade practices, they do not avail insurance coverage, the respondent should have directed the petitioner to produce oral evidence or affidavits substantiate their plea, in the absence of documentary evidence. If this had been done, the truth would have been established and the respondent would have been in a position to pass a reasoned order. However, the respondent, in a hurried manner, has completed the assessments, by passing such cryptic orders. Thus, for the above reasons, the impugned orders are liable to be set-aside - matters are remanded back to the respondent with a direction to furnish the documents sought for by the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders under Central Sales Tax Act for assessment years 2008-09 to 2014-15.

Analysis:
The petitioner filed writ petitions challenging assessment orders passed by the respondent under the Central Sales Tax Act for specific assessment years. This was the second time the petitioner approached the Court regarding the same assessment years. In a previous instance, the Court allowed the writ petitions and issued directions on how the assessments should be redone. The Court noted that the petitioner had provided necessary documents during the personal hearing, but the respondent completed the assessment in an arbitrary and cryptic manner, failing to conduct a thorough inquiry. The Court emphasized that the respondent should have discussed the nature of documents produced by the petitioner and conducted a detailed examination due to the voluminous nature of the documents. The Court set aside the impugned orders and remanded the matters back to the respondent for fresh consideration, emphasizing the need for a complete and thorough inquiry.

Upon reviewing the impugned assessment orders, the Court found that the respondent failed to understand the directions issued by the Court in the previous writ petitions. The orders were deemed cryptic and lacking in reasoning. A comparison with earlier assessment orders revealed that the previous orders contained more detailed reasons than the impugned orders. The respondent was found to be defiant to the Court's directions, failing to furnish the documents requested by the petitioner. Despite specific requests made by the petitioner regarding necessary documents, the respondent did not comply, doubting the transactions and suspecting 'bill trading'. The respondent insisted on proof of the movement of goods, which the petitioner addressed by providing explanations regarding the lack of certain documents like trip sheets and insurance copies for local movements.

After the earlier writ petitions, the respondent issued notices calling for specific documents, which the petitioner partially provided. The impugned orders were solely based on the petitioner's failure to produce certain documents like trip sheets and insurance copies. The petitioner explained the absence of these documents based on trade practices and provided alternative evidence. The Court highlighted that the respondent did not dispute the correctness of the documents provided by the petitioner but blamed them for not filing a detailed reply. The Court reiterated the importance of following the directions issued in the previous writ petitions and emphasized the need for a thorough assessment process to determine the correct rate of tax.

In conclusion, the Court set aside the impugned orders, remanding the matters back to the respondent with a directive to furnish the requested documents within a specified timeline. The petitioner was granted time to submit additional objections and provide oral evidence to support their claims. The respondent was instructed to conduct a proper assessment in accordance with the law after the personal hearing. No costs were awarded, and the connected Miscellaneous petitions were closed.