2019 (2) TMI 201 - HC - VAT and Sales Tax

Principles of natural justice - ex-parte order - sale of molasses taking place or not? - imposition of tax liability on the assessee for the quantities of molasses sold to M/s Rajasthan Cooperative Dairy Federation Ltd. - Held that - The revenue led sufficient evidence that the assessee had performed such sale, since those transactions had been found recorded in the books of accounts of the assessee without any narration of the same being commission sale. In such facts, it was for the assessee to have led positive and credible evidence either to disprove the allegation of the revenue or to set up its defense in light of any other evidence. The assessee chose to do neither - Despite an earlier ex-parte assessement order being set aside and that assessment being reopened, even upon such second opportunity, the assessee did not lead any credible evidence to establish its status of commission agent in the sale transactions performed between M/s Raj Enterprises, Uttarakhand and M/s Rajasthan Cooperative Dairy Federation Ltd, Ajmer. There does not arise any occasion to remit the matter (at this late stage), when the assessee had chosen not to file any application to lead additional evidence but had chosen to only place on record photocopies of certain documents before the Tribunal, which admittedly had not been filed up to that stage, before any authority. Revision dismissed.

Summary

Issues:
Assessment under the Central Sales Tax Act, 1956 for the assessment year - Claim of being a commission agent in sales transactions - Rejection of plea - Ex-parte assessment order - Fresh assessment - Tax liability reiterated - Lack of evidence to establish commission agency status - Appeal rejection - Documents not proved as additional evidence - Lack of certification linking the assessee to transactions - Lack of credible evidence - Disputed involvement in sale transactions - Lack of material to establish sales on own account - Lack of positive evidence to disprove revenue allegations - Lack of defense evidence - Lack of credible evidence of commission agency status - Lack of narration in books of accounts - Lack of credible evidence despite second opportunity - Lack of application for additional evidence - Lack of remittance due to lack of application for additional evidence.

Analysis:

The judgment by the High Court of Allahabad pertains to a revision filed by an assessee against an order passed by the Commercial Tax Tribunal. The assessee claimed to be a commission agent in sales transactions under the Central Sales Tax Act for the assessment year in question. The plea of being a commission agent was rejected, leading to an ex-parte assessment order being made against the assessee. However, this order was set aside, and upon fresh assessment, the tax liability was reiterated based on information from the revenue department indicating sales of molasses to a specific entity. The assessee never disputed involvement in the sales but claimed to act as a commission agent for the actual seller.

The first appeal against the assessment order was rejected, and the Tribunal did not consider certain documents filed by the assessee as additional evidence due to lack of proper application. The documents filed later with a revision application were not examined as they did not establish a link between the assessee and the sales transactions. The Tribunal found that the assessee was involved in the sale transactions, and there was sufficient evidence of the sales recorded in the books without any indication of being a commission sale. Despite multiple opportunities, the assessee failed to provide credible evidence to support its claim of being a commission agent.

The Tribunal concluded that the assessee did not provide any positive evidence to disprove the revenue's allegations or to support its defense. The lack of credible evidence and failure to file an application for additional evidence led to the dismissal of the revision. The Court emphasized that the documents submitted did not prove the commission agency status, and there was no basis to remit the matter without proper evidence. The judgment highlights the importance of presenting credible evidence and following proper procedures in legal proceedings to substantiate claims effectively.