2016 (1) TMI 46 - HC - VAT and Sales Tax

Revision of assessment - Best Judgment assessment - Section 22(6) - Held that - As seen from the best of judgment order as well as the impugned order, there were 8 discrepancies pointed out. Out of them, the appellant/ assessee has chosen to admit their liability in respect of three items. In respect of three other items, the Assessing Officer granted relief in favour of the assessee. Hence, what was left behind was only two issues out of the total of six. - The appellant claims that they have the books of accounts and proof. Therefore, we are of the considered view that by granting one opportunity to the appellant to produce the records before the Assessing Officer upon the payment of some portion of the tax demanded, ends of justice will be met. - Appeal disposed of.

Summary

Issues involved:
1. Challenge to order of assessment based on availability of alternative remedy.
2. Discrepancies in assessment leading to best judgment assessment under Section 22(4).
3. Appeal against the dismissal of writ petition due to the availability of an alternative remedy.
4. Contrary decision by Assessing Officer regarding manufacturing loss.
5. Claim of exemption from purchase tax for raw hides and skins for export.
6. Violation of reasonable opportunity to defend the case.
7. Consideration of discrepancies and liabilities admitted by the assessee.
8. Granting an opportunity to produce records for the issue of purchase tax.

Analysis:
The judgment by the Madras High Court involved a writ appeal challenging the dismissal of a writ petition against an order of assessment due to the availability of an alternative remedy. The appellant reported turnovers for the year 2012-13, which were accepted and assessed under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006. Subsequently, discrepancies were found, leading to a best judgment assessment under Section 22(4) after issuing a revision proposal. The appellant filed an application under Section 22(6) without appealing the revised assessment, leading to relief on some disputed items but not on others.

The Court acknowledged the general reluctance to entertain writ petitions against assessment orders when an appeal remedy exists but noted exceptions. One such exception was the clear contradiction in the Assessing Officer's decision on manufacturing loss, which was against a previous court judgment. The uniform application of rates for invisible loss was deemed incorrect, making an appellate remedy futile on this ground. Regarding the purchase tax exemption claim for raw skins turnover, the Assessing Officer denied relief due to lack of supporting documentation, leading to a claim of a violation of reasonable opportunity to defend the case.

The Court carefully considered the submissions and discrepancies, noting that only two issues remained unresolved out of the total. One issue in favor of the assessee was manufacturing loss, leaving the dispute centered on the purchase of raw skins turnover omission. The Court directed the appellant to produce records and books of accounts within two weeks for the Assessing Officer's review, suggesting the payment of a portion of the tax demanded. The writ appeal was allowed, setting aside the learned Judge's order and placing the Assessing Officer's order on hold pending the production of records. The appellant was instructed to deposit a sum without prejudice to both parties' rights, emphasizing the need to fulfill the ends of justice.