2020 (10) TMI 52 - HC - VAT and Sales Tax

Admissibility of additional evidence - Input Tax credit - stock transfer sales - months of January, February and March, 2007 - Whether, additional evidence could be adduced by the assessee at the appellate stage which is not permissible under Section 67 of the Uttarakhand Value Added Tax Act? HELD THAT - Even though an important question of law may arise for consideration, we do not think it appropriate to entertain this petition only because a paltry sum of ₹ 54,445/- is involved - Even though every single rupee is important for the State and for the assessee, but keeping in view the quantum involved and also in view of the prevalent pandemic in the country, we do not think it appropriate that this Court should venture into answering this question of law. Petition dismissed.

Summary

Issues:
1. Claim for Input Tax Credit
2. Admissibility of additional evidence at the appellate stage

Claim for Input Tax Credit:
The case involved the assessment of Input Tax Credit claimed by a manufacturer of Electrical Stamping for the Assessment Year 2006-07. The assessing authority allowed a benefit of &8377; 9,15,997/- out of the total claim of &8377; 9,70,442/-. The claim for &8377; 54,445/- was rejected on the grounds that the assessee had disbursed a significant portion of finished goods as stock transfer sales in specific months. The assessment order imposed a tax liability of &8377; 11,23,342/-, which was challenged by the assessee in a first appeal before the Joint Commissioner (Appeals). The appeal was partially allowed, granting relief to the extent of &8377; 54,445/- of Input Tax Credit. Subsequently, the revenue filed a second appeal before the Tribunal, which was dismissed, leading to the revision before the High Court.

Admissibility of additional evidence at the appellate stage:
The State of Uttarakhand contended that an important question of law arose regarding the permissibility of adducing additional evidence by the assessee at the appellate stage, which was allegedly not allowed under Section 67 of the Uttarakhand Value Added Tax Act. However, the High Court, despite acknowledging the significance of the legal question, declined to entertain the petition due to the relatively small amount involved (&8377; 54,445/-). The court emphasized the minimal quantum of the sum and the ongoing pandemic situation as reasons for not delving into the legal issue. The court decided to dispose of the petition without addressing the question of law, leaving it open to be considered in a more suitable petition in the future.

In conclusion, the High Court's judgment primarily focused on the assessment of Input Tax Credit claimed by the manufacturer, the partial relief granted in the first appeal, and the subsequent dismissal of the revenue's second appeal. The court's decision not to address the legal question raised by the State of Uttarakhand regarding the admissibility of additional evidence at the appellate stage was based on the trivial amount involved and the prevailing circumstances. The case serves as a reminder of the court's discretion in deciding which legal issues to address based on the merits and significance of the matter at hand.