2018 (3) TMI 978 - HC - VAT and Sales Tax

Validity of assessment order - smuggling - the challenge against Exts.P1 and P2 notices is on the ground that the same are issued without complying with the directions issued by the Appellate Tribunal in Ext.P3 order and this Court in Ext.P8 judgment. Held that - Since it was contended by the petitioner in the appeals and second appeals preferred against the assessment orders that proper enquiry was not conducted by the competent authority before making huge additions on that ground in their turnover, the Appellate Tribunal ordered the assessing authority to pass fresh orders after conducting an independent enquiry. It is seen that later when the petitioner complained that steps are being taken to complete assessments without providing them the copies of the materials proposed to be used against them, this Court, in terms of Ext.P8 judgment, directed the assessing authority to provide copies of all such materials. If as a matter of fact, the assessing authority has issued the impugned notices without complying the directions issued by the Tribunal in Ext.P3 order and this Court in Ext.P8 judgment, it is for the petitioner to challenge the assessment orders on that ground before the appellate authority. Petition is dismissed being one instituted without any bonafides.

Summary

Issues involved:
1. Assessment under Kerala General Sales Tax Act and Central Sales Tax Act for the year 2002-03.
2. Allegations of smuggling of rubber sheets leading to tax levy.
3. Compliance with directions of Appellate Tribunal and High Court.
4. Issuance of notices without providing materials to the petitioner.
5. Challenge against assessment orders and assessment process.

Analysis:

1. The petitioner, a dealer under the Kerala General Sales Tax Act and Central Sales Tax Act, faced assessments for the year 2002-03. The competent authority initially treated inter-state sales turnover of rubber sheets declared by the petitioner as purchases in the State, alleging smuggling of rubber sheets. The appellate authority affirmed the assessments, but the Appellate Tribunal allowed further appeals, remitting the matter for fresh consideration after an independent enquiry into the alleged smuggling.

2. Despite the petitioner's request for the report of the enquiry and an opportunity to rebut evidence, assessments were finalized without a hearing. The High Court set aside the assessment orders in a previous judgment, directing the assessing authority to pass fresh orders. Subsequently, the petitioner alleged non-compliance with the directions, leading to another petition. The Court disposed of the petition, ensuring the petitioner's access to documents for assessment.

3. The current challenge against notices (Exts.P1 and P2) is based on non-compliance with directions from the Appellate Tribunal and the High Court. The petitioner contests additions to their turnover due to alleged smuggling of rubber sheets. The Appellate Tribunal had ordered fresh orders after an independent enquiry, while the High Court directed the assessing authority to provide all relevant materials. Failure to comply with these directions could provide grounds for challenging assessment orders before the appellate authority.

4. The Court notes the prolonged assessment proceedings spanning about fifteen years due to various legal actions by the petitioner. The Court dismisses the current writ petition as an attempt to further delay the assessment process, emphasizing that challenges based on non-compliance with directions should be raised before the appropriate appellate authority. The petitioner cannot repeatedly approach the Court citing violations during assessment stages.

In conclusion, the judgment highlights the importance of compliance with legal directions during assessments, the right of the petitioner to challenge assessment orders based on non-compliance, and the Court's stance against using legal proceedings to prolong assessment processes.