2020 (8) TMI 736 - HC - VAT and Sales Tax

Rectification of mistake - section 84 of CST Act - petitioner has claimed that even though they had entered into certain sale transactions, some of them were reversed and they had erroneously shown the same in their sales return - variation in value as set out in the export documents and what was found in their books of account. HELD THAT - When the assessing authorities could accept the explanation of the assessee for the subsequent years, there is no reason for them to take a different stand in the instant year. Therefore, the orders impugned in the writ petition warrant interference. As regards the aspect, namely, sales return, it is seen that the petitioner has enclosed the certificate issued by the Chartered Accountants along with their explanation. The Chartered Accountants have certified that the transactions in question were executed by the assessee and that they had been reversed in their books of account. In other words, the transactions became unfructified sales. It appears that for proving bona fides, the documents regarding reversal of export sales were produced before the assessing authority. The assessing authority has rejected this stand of the petitioner by stating that the relevant documents have not been submitted. The reason given by assessing authority cannot be upheld - If the assessing authority is of the view that this is a false statement, the onus is on the authority. The petitioner cannot be expected to prove the negative. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Assessment of taxable turnover for the year 2015-16 under CST Act' 56 based on various transactions and documents submitted by the petitioner. Rectification petition filed under Section 84 of the Act for alleged mistakes in the order dated 31.08.2019. Challenge to the rectification order dated 23.10.2019 in a writ petition.

Analysis:
The judgment by the Madras High Court, delivered by Justice G.R. Swaminathan, pertains to the assessment of taxable turnover for the year 2015-16 under the CST Act' 56. The petitioner was called upon by the second respondent to file statutory declaration forms and other documents for claiming exemption on certain transactions. The impugned order dated 31.08.2019 determined the total taxable turnover to be Rs. 32,29,98,054/-. The petitioner challenged this order by filing a petition under Section 84 of the Act for rectifying alleged mistakes. The subsequent rectification order dated 23.10.2019 provided only partial relief, leading the petitioner to file a writ petition questioning both orders.

The key contentions raised by the petitioner included errors in showing certain sale transactions as reversed and discrepancies in the value of export documents compared to the books of account. The petitioner explained that the differences were due to fluctuations in foreign exchange, which is common in the export business. The petitioner presented a typed set of papers containing an order dated 02.06.2020, where a similar explanation was accepted by the authority. The court noted that the assessing authorities should have applied a consistent approach as in subsequent years.

The court found merit in the petitioner's contentions, emphasizing that the assessing authority's rejection based on the absence of certain documents was unjustified. It was observed that the petitioner had provided evidence, including a certificate from Chartered Accountants, to support the reversal of transactions. The court held that the burden of proof cannot be on the petitioner to disprove sales, and if the authority doubts the claim, the onus is on them to establish the contrary. Consequently, the court set aside the impugned orders in favor of the petitioner, directing the respondents to issue a revised order. The writ petition was allowed without costs, and the connected miscellaneous petition was closed.