2018 (5) TMI 179 - HC - VAT and Sales Tax

Validity of re-assessment order - demand notice in Form VAT-180 - Held that - It is well settled principle that entertaining the writ petitions against the assessment orders directly would consume the precious public time of the Court and would be contrary to the intent of the Legislation providing mechanism and machinery for resolving the dispute before the hierarchy of Authorities prescribed - It is well settled principle that entertaining the writ petitions against the assessment orders directly would consume the precious public time of the Court and would be contrary to the intent of the Legislation providing mechanism and machinery for resolving the dispute before the hierarchy of Authorities prescribed. Matter remanded to the respondent No.1 prescribed Authority for verification.

Summary

Issues: Challenge to re-assessment order for tax periods 2012-13.

The petitioner challenged the re-assessment order dated 19.03.2018 for the tax periods 2012-13, passed by the first respondent, alleging that the prescribed authority, an assessing officer from the enforcement wing, should not have been assigned to conduct the re-assessment. The petitioner contended that the authority rejected the returns and subjected the transactions to tax without proper consideration of the appellate authority's order in the same assessee's case for the earlier period. The petitioner argued that despite producing regular books of accounts, the authority did not appreciate the evidence presented. The petitioner further claimed that the authority failed to consider relevant legal judgments, including one from the High Court, and did not provide reasons for its decision.

The revenue, represented by the learned AGA, opposed the petitioner's arguments, stating that the petitioner had not exhausted alternative remedies available under the Act before directly invoking writ jurisdiction. The revenue argued that the authority had no personal bias and had properly scrutinized the matter before concluding the re-assessment based on the available material. The revenue emphasized that the petitioner's failure to produce relevant documents forced the authority to make a decision based on the information at hand. The revenue also cited a previous court order to support the dismissal of the writ petition for bypassing statutory remedies.

After hearing both parties, the Court found the petitioner's contentions baseless regarding the assignment of the authority for re-assessment. The Court noted that the choice of the authority lies with the Head of the Department, not the assessee. However, due to the petitioner's objection regarding the lack of produced books of accounts, the Court decided to quash the assessment order and remand the proceedings to the prescribed authority for a re-evaluation. The Court directed the petitioner to appear before the authority with the relevant books of accounts and instructed the authority to consider the judgments referred to by the petitioner and provide reasons for its decision. The Court emphasized the importance of resolving disputes through the prescribed hierarchy of authorities rather than directly through writ petitions.

In conclusion, the Court quashed the assessment order, remanded the proceedings to the authority for re-assessment, and set a deadline for the conclusion of the re-assessment process. The Court directed the authority to consider the evidence presented by the petitioner and provide reasons for its decision, ensuring a fair and just determination of the tax liability for the periods in question.