2018 (12) TMI 1281 - HC - VAT and Sales Tax

Validity of assessment order - imposition of penalty - case of petitioner is that the Assessing Officer has failed to record any reasons and his satisfaction that the escapement of tax was due to non-disclosure of the turn over by the Assessee - Held that - It is true that the petitioner has admitted the tax liability and paid the same before the Inspecting Officials in respect of the assessment years 2007-2008, 2011-2012, 2012-2013 and 2013-2014. Thereafter, the Assessing Officer has chosen to issue the notices of proposal for imposing penalty. It is evident that the Assessing Officer has not indicated the exact date of personal hearing to the petitioner. It is true that the petitioner did not file any reply to the notices of proposal - also, the perusal of the orders of assessment would show that the Assessing Officer has simply imposed the penalty only on the reason that the petitioner did not file any reply, without recording his satisfaction that the escapement of tax was due to willful non-disclosure of the turn over by the petitioner - thus, the Assessing Officer, if chooses to impose penalty, should specifically record his satisfaction in the order of assessment that the escapement of tax is due to willful nondisclosure of the turn over by the Assessee, since the order of assessment is being passed by way of quasi judicial proceedings and therefore, such orders should contain reasons justifying the conclusions. Therefore, this Court is inclined to set aside the impugned orders passed in respect of penalty in all the assessment years and remit the matter back to the Assessing Officer for reconsidering the issue once again, after receiving the reply from the petitioner. Assessment years 2014-2015, 2015-2016 & 2016- 2017 - Held that - It is not in dispute that one of the issue considered in those assessment years is mis-match issue - in respect of the mismatch issue. The matters are remitted back to the Assessing Officer to redo the assessments only in respect of mis-match issue and penalty - petition allowed by way of remand.

Summary

Issues:
Challenging assessment orders for multiple years; Disputing tax liability and penalty imposition; Lack of satisfaction recorded by Assessing Officer for penalty imposition; Non-disclosure of turnover; Mis-match issue in assessment years 2014-2017; Guidelines from previous court decisions; Remitting matters back to Assessing Officer for reconsideration.

Analysis:
The writ petitions challenge assessment orders for various years, focusing on tax liability and penalty imposition. The petitioner admitted tax liability for certain years but contested penalties. The key argument revolves around the Assessing Officer's failure to record a satisfaction that tax evasion was due to willful non-disclosure of turnover. The court emphasized the necessity for such findings in penalty imposition, highlighting a previous judgment's observation on defective penalty notices. The court set aside penalty orders for all years, directing reconsideration by the Assessing Officer after receiving the petitioner's reply.

In the assessment years 2014-2017, a mis-match issue was raised, referencing guidelines from a prior court decision. The Assessing Officer's failure to address this issue as per the court's directions led to the court remitting the matter for reevaluation. While the petitioner accepted liability for other issues, payment was required if not made previously. However, for the mis-match issue, a reevaluation following the court's guidelines was mandated. The court allowed the writ petitions, setting aside assessment orders related to the mis-match issue and penalties, with a condition for the petitioner to pay 15% of tax liability within a specified period.

Considering all aspects, the court allowed certain writ petitions in full and others partially. The orders of assessment imposing penalties were set aside, and the matters were remitted back to the Assessing Officer for reassessment. The court directed the petitioner to respond to proposal notices within a specified timeframe for reevaluation. For assessment years involving mis-match issues, a similar remittance for reassessment was ordered, subject to the petitioner paying a percentage of tax liability within a set period. The court stressed adherence to guidelines from previous court decisions in handling the mis-match issue during reassessment.