2022 (1) TMI 196 - HC - VAT and Sales Tax

Rejection of account books of the applicant - best judgement assessment against the applicant - Consideration of affidavit of Shri Jagdish Prasad and Jangi Lal which were filed before the assessing authority and were pressed before the Ist appellate authoritity as well as before the Tribunal - HELD THAT - The specific directions given by this Court vide order dated 14.11.2013 has not been complied with. The specific requirement for filing of the counter affidavit was to explain as to why the affidavit filed by the dealer in support of his contention was not considered by the appellate authority. The counter affidavit so filed, does not whisper a word for which the affidavit was sought. The respondents have just in a casual manner has filed the counter affidavit. When a specific direction was there, the affidavit must be filed as per the directions and not on the whims and fancies of the officers. This act of the department is deprecated. The matter is remanded to the Tribunal to re-consider the same without being influenced with the observations made by the assessing authority - revision allowed by way of remand.

Summary

Issues:
1. Interpretation of affidavits in tax assessment proceedings.
2. Consideration of account books in best judgment assessment.

Analysis:
1. The case involved two revisions against an order passed by the Commercial Tax Tribunal under the UP VAT Act. The main questions of law in both revisions were related to the consideration of affidavits filed by the applicant, specifically whether the authorities were justified in not considering the affidavits of certain individuals during the assessment proceedings. The revisionist argued that the seized documents were not connected to their business, as indicated in the affidavits, and that the Tribunal failed to independently evaluate this evidence. The Standing Counsel, on the other hand, supported the order of the appellate authority, stating that the assessing authority had already considered the affidavits.

2. The Court observed that the applicant was engaged in the business of purchasing and selling specific materials. During a survey, certain documents were seized, leading to an adverse inference by the assessing authority. The applicant contended that the seized items did not belong to them, as affirmed in the affidavits. The Court criticized the Tribunal for merely referencing the assessing authority's observations without conducting an independent assessment. The Court emphasized the importance of the Tribunal's role as the final arbiter of facts and law, highlighting the need for an independent evaluation. Additionally, the Court noted that despite a specific direction to file a counter affidavit explaining the non-consideration of the dealer's affidavit, the response provided did not address this crucial point, leading to criticism of the department's casual approach.

3. In conclusion, the Court allowed the revisions, setting aside the Tribunal's order and remanding the matter for re-consideration without influence from the assessing authority's observations. The Court emphasized the need for a thorough and independent review of the evidence, especially affidavits, in tax assessment proceedings. The Court's decision aimed to ensure a fair and unbiased evaluation of the facts presented by the parties involved. The judgment highlighted the importance of compliance with court directions and the need for authorities to provide substantive responses in legal proceedings to uphold the principles of justice and due process.