2021 (3) TMI 289 - HC - VAT and Sales Tax

Demand of additional sales tax from the petitioner for the years 2001-2002 to 2004-2005 as also the penalty of the said authority imposed under Section 13 of Tripura Sales Tax Act, 1979 - HELD THAT - The petitioner had claimed that sizeable quantity of cement was damaged in railway transportation which the petitioner was forced to sell at a very low price. The Assessing Officer in absence of reliable evidence and documents did not accept this theory and after issuing notice to the petitioner proceeded to pass the order of assessment, relevant portion of which we have reproduced earlier. Perusal of the order of Assessing Officer would show that entire issue is factual in nature and no question of law would arise since the petitioner has not demonstrated any perversity in the factual findings of the Assessing Officer. Even the revisional authority has examined the issue all over again and found no reason to set aside the assessment order. Penalty - HELD THAT - In the present case, however, we are not inclined to terminate the penalty proceedings permanently but will allow the Assessing Officer to pass a fresh order after hearing the petitioner. Petition disposed off.

Issues Involved:
1. Assessment of additional sales tax and penalty under the Tripura Sales Tax Act, 1976 (TST Act).
2. Validity of the assessment order and the process followed by the Assessing Officer.
3. Imposition of penalty without adequate opportunity for hearing.
4. Jurisdiction and procedural propriety in the revisional order.

Detailed Analysis:

1. Assessment of Additional Sales Tax and Penalty:
The petitioner challenged an assessment order dated 22nd March 2006, which demanded additional sales tax and imposed a penalty under Section 13 of the TST Act for the years 2001-2002 to 2004-2005. The revisional authority confirmed this order on 23rd December 2015.

2. Validity of the Assessment Order:
The petitioner, a C&F Agent dealing in cement, claimed that a portion of the cement transported via railway was damaged, necessitating disposal at low rates. The Assessing Officer did not fully accept this claim due to insufficient evidence. The officer noted discrepancies in the petitioner's records and indicated that the claim of damage was a device to conceal taxable turnover. The officer assessed the payable tax by comparing the office and dealer records, noting differences in the quantity of cement bags.

3. Imposition of Penalty:
The Assessing Officer imposed a penalty, observing that the petitioner had suppressed actual sales to evade tax. The petitioner was given an opportunity to justify the damage claim but failed to produce satisfactory evidence. The officer imposed a penalty at 25% of the concealed tax amount without issuing a separate show-cause notice, which the petitioner argued was a breach of natural justice and Section 13(2) of the TST Act.

4. Revisional Order and Procedural Propriety:
The petitioner’s revision petition was dismissed by the Commissioner, who found no conclusive proof of the claimed damage and noted that the petitioner failed to submit necessary documents for excess cement quantities. The Commissioner remanded the case for reassessment on the excess quantity issue, allowing the petitioner to produce evidence before the Assessing Officer.

Court’s Observations:
The court noted that the issue of cement damage was factual, and the petitioner did not demonstrate any perversity in the Assessing Officer's findings. The revisional authority also upheld the assessment order. However, the court found the penalty imposition procedurally flawed, as the petitioner was not given adequate opportunity to be heard, violating Section 13(2) of the TST Act.

Conclusion:
The court confirmed the assessment order regarding additional tax but set aside the penalty, granting the Assessing Officer liberty to pass a fresh penalty order after proper hearing. The court emphasized that the penalty proceedings must adhere to procedural requirements and natural justice principles. The petition was disposed of with directions for the Assessing Officer to issue a fresh notice by 31st March 2021, ensuring the continuation of the original proceedings.

Final Disposition:
The petition was disposed of, confirming the additional tax assessment and setting aside the penalty with instructions for a fresh order after hearing the petitioner. Pending applications were also disposed of.

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