2018 (12) TMI 1003 - HC - VAT and Sales Tax

Reopening of assessment - escaped taxation - levy of penalty - TNGST Act - Held that - On a perusal of the records of the case, the order of the appellate authority and the Tribunal, which are the final fact finding authority, it is seen that they have come to the conclusion that Slip Nos. 10 and 11, do not point any sales suppression and that therefore, proceedings cannot be initiated under Section 16(1) of the TNGST Act, for reopening of the completed assessment, so as to include therein any turn over, which had escaped taxation. There is no evidence or materials which would justify initiation of proceedings under Section 16(1) of the TNGST Act - Revision dismissed.

Summary

Issues:
Assessment based on recovered slips, Sales suppression, Appeal against revised assessment, Tribunal's decision on sales suppression, Challenge in revision petition, Evidence of sales suppression in recovered slips, Initiation of proceedings under Section 16(1) of TNGST Act.

Analysis:
The Tax Case (Revision) Petition was filed by the State of Tamil Nadu against the order of the Tamil Nadu Sales Tax Appellate Tribunal (Additional Bench) in response to the assessment of Tvl. Suraj Steels for the year 2003-2004. The assessment was revised based on slips recovered during an inspection by Enforcement Wing Officers, leading to the imposition of tax and penalty under the TNGST Act. The Appellate Deputy Commissioner (CT-II), Chennai, found that out of the 11 slips recovered, 9 were accounted for by the respondent, indicating no sales suppression. The remaining 2 slips lacked essential sale elements, resulting in the revised assessment order being set aside.

The Department appealed this decision before the Sales Tax Appellate Tribunal, which upheld the appellate authority's findings, concluding that there was no sales suppression. During the hearing, it was revealed that the respondent had ceased business activity before the assessment year in question and did not maintain detailed books of account. The recovered slips were scrutinized, with the authorities determining that Slip Nos. 10 and 11 did not demonstrate any sales or purchase transactions, thus negating the need for reopening the assessment under Section 16(1) of the TNGST Act.

Upon reviewing the records, the High Court concurred with the lower authorities' conclusions that Slip Nos. 10 and 11 did not indicate any sales suppression, thereby dismissing the Tax Revision Case. The Court found no justification for initiating proceedings under the TNGST Act based on the evidence presented in the recovered slips. The orders of the authorities below were deemed appropriate, and no interference was warranted, leading to the dismissal of the case without costs.