2023 (1) TMI 340 - HC - VAT and Sales Tax

Validity of assessment order - not considering the impugned Transaction as Branch Transfer Transaction - exemption from payment of Tax under Section 6A of the CST Act - absence of any means rea of the Appellant or an intent to evade payment of tax - levy of penalty @150%. HELD THAT - The attention of this Court is drawn to the analysis of the facts by the Tribunal on 08.07.2022. It is also not in dispute that the methodology adapted for the Maharashtra Branch, where 15 transactions are made, the Tribunal at Maharashtra has accepted lorry receipts and that aspect has been overlooked by the Assessing Officer while analyzing the facts. Likewise, two transactions which had taken place at Rajasthan also has been overlooked by A.O. Noticing the fact that essential dealing on the facts and this glaring facts have been overlooked, let the matter be remitted back to the Tribunal. Till the Tribunal decide this aspect by applying its mind after availing the opportunity to the parties, there shall be no recovery. As pre-deposit is already made of Rs.1,25,000/-, the Tribunal shall also be entitled to consider the request for the stay of the matter, once the parties are appeared. The Second Appeal before the Tribunal will be restored being Second Appeal No.736 of 2012 with regard to the bank accounts which have been attached pursuant to the recovery initiated shall be lifted by the Authority. Application disposed off.

Summary

Issues involved:
Assessment of tax, interest, and penalty by the Assessing Officer, rejection of appeal by the first appellate authority, Second Appeal before the Gujarat Value Added Tax Tribunal, questions of law regarding Branch Transfer Transaction, consideration of material on record, intent to evade payment of tax, and penalty imposition.

Assessment of tax, interest, and penalty:
The Assessing Officer assessed the appellant and determined a sum which included tax, interest, and penalty. The appellant appealed before the Joint Commissioner of Commercial Tax, where the first appellate authority rejected the appeal and confirmed the assessment order. An amount was paid as pre-deposit during the First Appeal process.

Rejection of appeal and Second Appeal:
The appellant then preferred a Second Appeal before the Gujarat Value Added Tax Tribunal, challenging the order of the First Appellate Authority. The Tribunal, on a later date, negated the contentions raised by the appellant and rejected the Second Appeal, confirming the order of the First Appellate Authority.

Questions of law raised before the Court:
The appellant approached the High Court seeking to raise questions of law related to the Tribunal's decision. The questions included whether the impugned transaction should be considered a Branch Transfer Transaction exempted from tax, whether the Tribunal erred in not considering the material on record, and whether the penalty could be levied without evidence of intent to evade tax.

High Court's decision and remittance to the Tribunal:
The High Court analyzed the facts and discrepancies in the assessment process. It noted that certain essential facts were overlooked by the Assessing Officer and the Tribunal. Due to these oversights, the matter was remitted back to the Tribunal for a fresh consideration. The High Court directed that there should be no recovery until the Tribunal reconsiders the matter. The pre-deposit made by the appellant was acknowledged, and the Tribunal was given the authority to decide on the stay of the matter. The Second Appeal before the Tribunal was restored, and the attachment of bank accounts for recovery purposes was lifted.

Conclusion:
The High Court's decision to remit the matter back to the Tribunal for a fresh consideration based on overlooked facts showcases the importance of a thorough analysis in tax assessment cases. The appellant's questions of law were addressed, and the procedural aspects of the case were duly considered, ensuring a fair and just resolution to the dispute.