2018 (1) TMI 611 - HC - VAT and Sales Tax

Inter-state sales - suppression - exemption - Held that - Merely because the vehicles had moved from Mannargudi to the Container Corporation of India Ltd., there cannot be any interference that the vendor had effected interstate sales on the above, both the appellate authority and the Tribunal have recorded their concurrent findings that the vendor cannot be found fault with, but the buyer is the real culprit. Under Article 226 of the Constitution of India, Courts should not interfere with the concurrent findings of the fact unless, on conclusion, by material on record, hold that there is perversity. There is no merit in the contention of the writ petitioners nor there is any case to interfere, on the substantial questions of law, raised. Tax Case Revision Petitions are dismissed.

Issues Involved:
1. Whether the Tribunal is legally correct in affirming the order of the first lower authority without independent analysis.
2. Whether the non-restoration of the consequent penalty by the Tribunal is legally sustainable.

Issue-wise Detailed Analysis:

1. Tribunal's Affirmation of Lower Authority's Order:

The High Court examined whether the Tribunal correctly affirmed the Appellate Assistant Commissioner's order without independent analysis. The case involved Gothai Dal Traders, who claimed tax exemptions for second sales of green grams for the assessment years 2000-2001 and 2001-2002. The Deputy Commercial Tax Officer disallowed these exemptions, alleging that the sales were inter-state and thus taxable. The Appellate Assistant Commissioner found that the assessing authority did not adhere to the principles of audi alteram partem, as the dealer's request to cross-examine Venkateshwara Traders was denied. The Tribunal upheld this decision, noting that the dealer had provided necessary documents, such as invoices, lorry receipts, and ledger extracts, supporting their claim of local sales. The Tribunal concluded that the assessing officer relied solely on the buyer's statement without allowing cross-examination, resulting in a grave injustice to the dealer. The High Court agreed with the Tribunal's decision, emphasizing that the assessing officer's conclusion was based on insufficient evidence and that the dealer had established their case through documentary evidence.

2. Non-restoration of Penalty:

The High Court also addressed whether the Tribunal's decision to not restore the penalty was legally sustainable. The assessing officer had imposed penalties under Section 9 (2-A) of the Tamil Nadu General Sales Tax Act, 1959, read with Section 12 (3) (v) of the same Act. The Appellate Assistant Commissioner set aside these penalties, and the Tribunal upheld this decision. The Tribunal reasoned that the assessing officer had no sufficient materials to prove that the dealer had evaded tax through inter-state sales. The High Court concurred, noting that the buyer's statement, which was not subjected to cross-examination, and the movement of lorries alone were not enough to conclude that the dealer had suppressed inter-state sales. The High Court emphasized that findings of fact by lower authorities should not be interfered with unless they are perverse, which was not the case here.

Conclusion:

The High Court dismissed both Tax Case Revision Petitions, affirming that the Tribunal and the Appellate Assistant Commissioner had thoroughly analyzed the evidence and arrived at a proper conclusion. The High Court found no merit in the petitioner's contentions and upheld the lower authorities' findings that the dealer had not engaged in inter-state sales and was not liable for the penalties imposed. The decision emphasized the importance of adhering to principles of natural justice and the need for concrete evidence in tax assessment cases.

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