2017 (3) TMI 1425 - HC - VAT and Sales Tax

Validity of assessment order - it is the petitioner s case that the respondent has proceeded to pass the said order on account of the variation in the information - Held that - there is an contradiction in the impugned order. On the one hand, the respondent says that all monthly returns for the year 2014-2015 were filed by the petitioner and on the other hand, he holds that no monthly returns were filed. Furthermore, the respondent, proceeds to impose tax and penalty based on mismatch in information. This Court, has repeatedly, held that mismatch in information cannot be the sole basis for imposing tax and penalty. In case, respondent was desirous of confirming the proposal, he should have in the very least supplied the material particulars to the petitioner - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to tax and penalty imposition based on information variation in monthly returns.

Analysis:
The petitioner challenged an order imposing tax and penalty amounting to ?61,382/- and ?92,073/- respectively, due to a variation in information between the department website and monthly returns. The respondent alleged the petitioner did not file monthly returns from August 2014 onwards, despite indicating otherwise in the same order. The petitioner argued that tax and penalty cannot be imposed solely based on information mismatch, citing relevant judgments. The respondent issued a notice proposing the levy, which the petitioner did not respond to. The court noted the contradiction in the order and emphasized that mismatch in information alone cannot justify tax and penalty imposition. The court directed the respondent to redo the assessment after providing all material facts to the petitioner.

This judgment highlights the importance of providing material particulars before imposing tax and penalty based on information discrepancies. The court emphasized that mismatch in information cannot be the sole basis for imposing tax and penalty, especially without supplying relevant details to the petitioner. The court set aside the impugned order and granted liberty to the respondent to redo the assessment after disclosing all material facts to the petitioner. The judgment serves as a reminder of the necessity for transparency and proper communication in tax assessments to ensure fairness and compliance with legal principles.