2015 (12) TMI 1194 - HC - VAT and Sales Tax

Benefit under Section 9(1) of the DVAT for input tax credit - transactions involving the two firms were sham/bogus transactions - validity of order of the Objection Hearing Authority (OHA) to remand back the cast of AO - Held that - Whatever may be the grievance with the Assessee as against the order dated 10th November, 2015, it would have to be agitated before the appropriate authority before whom an appellate remedy is available to the Assessee. In other words as and when the Assessee challenges the Assessing Authority s order dated 10th November 2015 before the OHA, on all grounds that are available to him in accordance with law, the said grounds would be examined on merits by the OHA. It is beyond the scope of the present appeal for this Court to examine the correctness of the said order. Any opinion expressed at this stage on any of the above contentions of the Assessee might prejudice the proceedings before the OHA and, therefore, the Court leaves open all the grounds that the Assessee has urged to be taken up before the OHA as and when the appeal is filed before it by the Assessee. - Decided against Assessee.

Summary

Issues:
1. Remand proceedings completion for hearing the appeal.
2. Validity of order dated 23rd May, 2014 by the Appellate Tribunal.
3. Examination of transactions with selling dealers.
4. Credit of Value Added Tax.
5. Grounds of challenge against order dated 10th November, 2015.
6. Maintainability of appeal before the Objection Hearing Authority.

Issue 1:
The High Court noted that the completion of remand proceedings was essential for the hearing of the appeal. The Assessing Authority passed an order on 10th November 2015, concluding that transactions with two firms were sham, affecting the input tax credit under Section 9(1) of the DVAT Act.

Issue 2:
The appeal challenged the order dated 23rd May, 2014, passed by the Appellate Tribunal concerning a default tax assessment after an audit of the Appellant. The Tribunal reiterated the order of the Objection Hearing Authority, directing remand proceedings to the Assessing Authority.

Issue 3:
The transactions between the Appellant and two selling dealers were under scrutiny for being suspicious. The Objection Hearing Authority and the Tribunal found the transactions questionable, leading to the remand proceedings for further examination by the Assessing Authority.

Issue 4:
A substantial question of law arose regarding whether the Appellant could get credit for Value Added Tax if the selling dealers did not deposit the tax with the authorities. The Court highlighted the importance of examining the genuineness of transactions for determining the applicability of VAT credit.

Issue 5:
The Appellant challenged the order dated 10th November 2015, alleging lack of opportunity to challenge materials, cross-examine witnesses, and present evidence. The Court directed the Appellant to raise these grounds before the appropriate authority during the appellate process.

Issue 6:
The Appellant's contention regarding the maintainability of the appeal before the Objection Hearing Authority was dismissed. The Court clarified that the impugned order was not an interim order and did not fall under the provisions cited by the Appellant, emphasizing the need for the Appellant to pursue the appeal through the proper channels.

In conclusion, the High Court dismissed the appeal, stressing the importance of following the appropriate appellate procedures and refraining from premature opinions that could impact the ongoing proceedings before the Objection Hearing Authority. The judgment highlighted the significance of thorough examination of transactions, adherence to legal provisions, and the proper presentation of grievances within the established legal framework.