2020 (3) TMI 733 - HC - VAT and Sales Tax

Validity of assessment order - cancellation of registration of dealer - Gujarat VAT Act - HELD THAT - It is not in dispute that the assessment order came to be passed pursuant to the returns, said to have been filed by the writ-applicant. However, in fact, no such returns were filed by the writapplicant and it was the Tax Consultant who created the bogus record - There is no hesitation in quashing the assessment order as well as the order passed by the first appellate authority dated 31st July, 2018. The matter is remitted to the authority concerned for fresh hearing on the subject - Appeal allowed by way of remand.

Summary

Issues:
Challenge to assessment order, challenge to order of first appellate authority, cancellation of registration under GVAT Act.

Analysis:
1. The petitioner filed a Writ Application challenging the assessment order passed by the Assessing Officer and the order by the first appellate authority. The petitioner sought to quash these orders citing them as illegal and violative of Article 14 of the Constitution of India. The petitioner also requested a stay on the implementation of these orders during the pendency of the petition. Additionally, the petitioner asked for permission to file an appeal against the assessment orders and waiver of pre-deposit requirements.

2. The facts revealed that the Tax Consultant of the petitioner misused the TIN Number for bogus dealings without the petitioner's knowledge. The assessment order demanded a substantial tax amount based on false returns filed by the Tax Consultant. A similar case involving the same Tax Consultant was highlighted, where criminal prosecution was initiated against the consultant for similar fraudulent activities.

3. The Court acknowledged the fraudulent actions of the Tax Consultant and the wrongful assessment based on fabricated returns. Consequently, the assessment order and the order of the first appellate authority were quashed due to the fraudulent nature of the filings. The Court also decided to remit the matter to the authority concerned for fresh hearing to provide the petitioner with an opportunity to present their case.

4. The order cancelling the registration under the GVAT Act was also challenged. The Court deemed it appropriate to quash this order as well and remit the matter for a fresh hearing. The Assessing Officer was directed to re-examine the case and pass an appropriate order in accordance with the law, considering the fraudulent activities of the Tax Consultant.

5. The Writ Application was disposed of with the quashing of the assessment order, the order of the first appellate authority, and the cancellation of registration under the GVAT Act. The matter was remitted for fresh hearings, and the Assessing Officer was instructed to reevaluate the case. The Court granted direct service and allowed the rule to be made absolute to the specified extent.