2022 (5) TMI 140 - HC - VAT and Sales Tax

Return of seized material (13 loose papers) - rejection of explanation pertaining to seized materials as an afterthought - order of assessment was against the principles of natural justice or not - rebate against purchases from unregistered dealer at the time of assessment - enhancement of suppressed purchases and evaded sales - HELD THAT - Admittedly, the order dated 29.11.2013 specifically states that all the loose parchas found at the time of survey dated 30.10.2012 be retained till passing of the order by the first appellate authority. In this background, the applicant submitted the reply, but so far as the reply to the seized documents, i.e., parcha nos. 1, 5, 7 8, were concerned, the same were also submitted. The Tribunal, being a last Court of fact, ought to have considered the submission made by the learned counsel for the applicant, but the same has not been considered and only on the ground that it is an afterthought, the same has been rejected. The matter is remanded back to the Tribunal to reconsider the matter afresh in the light of the observations made and decide the same in accordance with law - Revision allowed.

Summary

Issues:
1. Interpretation of seized material in tax assessment
2. Consideration of report by SIB authority
3. Rebate against purchases from unregistered dealer
4. Restoration of suppressed purchases and evaded sales
5. Restoration of assessment order without specific findings
6. Opportunity of hearing for the applicant

Interpretation of Seized Material in Tax Assessment:
The revisions were filed against judgments by the Commercial Tax Tribunal regarding the interpretation of seized material during tax assessment. The Tribunal rejected explanations regarding seized materials, labeling them as an afterthought. The Court noted that the seized documents were retained until the first appellate authority's order, and the applicant's submissions were not fully considered by the Tribunal. Consequently, the Court set aside the Tribunal's orders and remanded the matter for a fresh consideration.

Consideration of Report by SIB Authority:
The Court addressed the issue of whether the report by the SIB authority under Section 45(10) of the Act was properly considered. It was argued that the applicant was denied the opportunity to challenge the report, leading to a violation of natural justice principles. The Court emphasized the importance of allowing the applicant to confront and challenge such reports, indicating a procedural flaw in the assessment process.

Rebate Against Purchases from Unregistered Dealer:
Another issue raised was the denial of rebate against purchases from unregistered dealers at the time of assessment. The Tribunal's decision not to allow the rebate was questioned. However, the Court's judgment did not provide specific details on the reasoning behind this issue, leaving room for further clarification in subsequent proceedings.

Restoration of Suppressed Purchases and Evaded Sales:
The Tribunal's decision to restore the enhancement of suppressed purchases and evaded sales was also challenged. The Court noted discrepancies in the assessment process, particularly regarding the restoration of certain amounts without clear evidence or findings. This raised concerns about the validity and accuracy of the assessment order, prompting the Court to remand the matter for a thorough reconsideration.

Restoration of Assessment Order Without Specific Findings:
The Court highlighted the Tribunal's actions in restoring the assessment order without specific findings or explanations. This lack of clarity and transparency in the decision-making process was deemed problematic, leading to the Court setting aside the Tribunal's orders and instructing a reevaluation of the case.

Opportunity of Hearing for the Applicant:
Lastly, the Court examined whether the applicant was provided with a fair opportunity of hearing throughout the assessment and appeal process. The Court found discrepancies in how the applicant's submissions were considered, indicating a potential violation of procedural rights. As a result, the Court emphasized the importance of ensuring a proper opportunity for the applicant to present their case effectively.

In conclusion, the Court's judgment addressed various procedural and substantive issues related to tax assessment, emphasizing the need for a fair and thorough consideration of evidence and submissions. The remanding of the matter back to the Tribunal reflects the Court's commitment to upholding principles of natural justice and procedural fairness in legal proceedings.