2019 (10) TMI 21 - HC - VAT and Sales Tax

Validity of assessment order - demand of tax on sales - exempted sales of goods purchased from outside the State - Telangana Value Added Tax Act, 2005 - HELD THAT - There are merit in the submission made by the learned counsel as it was for the Assistant Commissioner to specifically call upon the petitioner in the event any further information, in particular, was sought. Merely issuing a show cause notice calling for objections would not suffice in this regard. The impugned assessment order is accordingly set aside - the matter is remitted to the file of the Assistant Commissioner (State Tax), Rajendranagar Circle, Hyderabad, for consideration afresh - petition allowed by way of remand.

Summary

Issues: Challenge to assessment order under the Telangana Value Added Tax Act, 2005

Analysis:
The writ petition challenges the order passed by the Assistant Commissioner (State Tax) regarding the tax period 2014-15 to 2017-18 under the Telangana Value Added Tax Act, 2005. The petitioner approached the High Court under Article 226 of the Constitution of India, arguing that the assessment order lacked proper application of mind. The order authorized an audit of the petitioner's returns, verifying the correctness and completeness of the filed returns with reference to various documents. The Assistant Commissioner noted that although a show-cause notice was issued and a reply was received from the petitioner, no evidence was submitted to support the claim of exempted sales, leading to a confirmed tax liability of ?3,06,03,265.

The petitioner's counsel contended that genuine transactions were audited, and it was unjust for the Assistant Commissioner to disregard them solely based on the lack of submitted evidence, imposing a substantial tax liability without specifying the additional evidence required. The High Court agreed with the petitioner's argument, emphasizing that the Assistant Commissioner should have explicitly requested further information if needed, rather than solely relying on the show-cause notice. Consequently, the assessment order dated 05.08.2019 was set aside, and the matter was remitted back to the Assistant Commissioner for a fresh consideration. The Assistant Commissioner was directed to issue a detailed show-cause notice specifying the evidence required from the petitioner, allowing for a response and a personal hearing before completing the assessment.

In conclusion, the High Court allowed the writ petition, dismissed any pending miscellaneous petitions, and made no order as to costs in this matter.