2016 (11) TMI 497 - HC - VAT and Sales Tax

Validity of assessment order - business of Coke and Power Generation - C Forms - high seas sales - Held that - the respondent, after considering the documents produced by the petitioner, more particularly with regard to high sea sales, observed that copies of certain documents were not available. If that be the case, nothing prevented the respondent from calling upon the petitioner to produce those documents, failing which, the respondent could have drawn an adverse inference. Similarly, there is no discussion as to why the debit notes and credit notes produced by the petitioner along with their reply dated 16.12.2015, were not taken into consideration. That apart, there is nothing on record to show that notice for personal hearing was issued to the petitioner and in spite of an opportunity, the petitioner did not produce the documents. Hence, it is held that the impugned order dated 26.8.2016 is in violation of the principles of natural justice and that the respondent has not taken into consideration the material facts placed by the petitioner before the respondent. In the light of the above, the assessment has to be redone. Petition disposed off - matter on remand.

Summary

Issues:
Challenge to assessment order under Central Sales Tax Act for 2013-14 and consequential recovery notice.

Analysis:
The petitioner, a limited company engaged in Coke and Power Generation, challenged an assessment order under the Central Sales Tax Act for the year 2013-14 and the consequential recovery notice. The respondent issued notices regarding sales against Form C and proposed to reject monthly returns, impose penalties, and revise turnover for the same year. The petitioner requested time to receive more C Forms and submitted various documents in response to the notices.

The respondent, while completing the assessment, disallowed a major portion of high sea sales, stating lack of required documents. The respondent confirmed the proposal in the notice dated 5.10.2015, resulting in tax demand. The petitioner argued that documents related to high sea sales and other transactions were produced, but not verified by the respondent before passing the order. The petitioner also highlighted the lack of personal hearing opportunity.

The Court observed that the respondent did not call for missing documents or discuss why debit and credit notes were not considered. It held the impugned order violated principles of natural justice and failed to consider material facts provided by the petitioner. Consequently, the assessment was deemed to be redone.

Accordingly, the writ petition was allowed, impugned orders set aside, and the matter remitted back to the respondent for fresh consideration. The respondent was directed to provide a personal hearing opportunity, review all documents, seek necessary clarifications, and redo the assessment within six weeks from the date of the order. No costs were awarded, and the related WMP was closed.