2019 (2) TMI 839 - HC - VAT and Sales Tax

Rate of tax - omission to disclose certain purchases - uniform rate of tax at 14.5% or not? - the core contention is that while levying the tax, the assessing officer ought to have levied only the applicable rate of taxes. On the other hand, the second respondent had levied a uniform of rate of tax at 14.5% - Held that - It is not in dispute that there has been an omission on the part of the petitioner to disclose the purchase made by them. It is also not in dispute that the second respondent is posted with all the purchase details. When the second respondent is having the relevant invoices and is also aware or the applicable rate of tax, the second respondent ought to have levied only at the applicable rate of taxes. But in this case, the second respondent has chosen to levy tax at an uniform rate of 14.5%. This in my view is clearly unreasonable and vitiates the proceedings. This Court cannot fail to take note of the petitioner s conduct. When a question was posed as to whether the petitioner had remitted atleast the demanded tax as per their own calculation, the learned counsel for the petitioner submitted that the petitioner had already paid more than ₹ 44 Lakhs which is more than the admitted tax amount - second respondent will give an opportunity of personal hearing to the petitioner and pass order afresh and in accordance with law - petition allowed.

Summary

Issues:
Assessment year 2013-2014, Major purchase omission, Assessment order challenge, Applicable rate of taxes, Uniform tax rate of 14.5%, Remittance to the file of the second respondent, Conduct of the petitioner, Set aside the impugned order, Amount already paid by the petitioner, Opportunity of personal hearing, Order afresh and in accordance with law.

Analysis:

1. Major Purchase Omission:
The petitioner, an assessee, failed to disclose certain purchases while filing returns for the assessment year 2013-2014. The second respondent discovered this omission and passed an assessment order. The petitioner challenged this order through a writ petition, leading to a remand and subsequent order by the second respondent.

2. Applicable Rate of Taxes:
The core contention was that the assessing officer should have levied taxes at the applicable rate, rather than a uniform rate of 14.5% as done by the second respondent. The petitioner argued that the omission was inadvertent and not deliberate, emphasizing the need for correct tax calculation.

3. Judicial Review of the Order:
During the hearing, the court acknowledged the petitioner's conduct of paying more than the admitted tax amount, exceeding ?44 Lakhs. Despite the petitioner's error, the court found the second respondent's decision to levy tax uniformly at 14.5% unreasonable and held that it tainted the proceedings.

4. Court's Decision:
Considering the petitioner's payment exceeding the admitted tax amount and the second respondent's error in applying a uniform tax rate, the court set aside the impugned order. The amount paid by the petitioner would be retained by the second respondent, pending the final outcome of the proceedings. The second respondent was directed to provide the petitioner with a personal hearing and issue a fresh order in compliance with the law.

5. Conclusion:
Ultimately, the writ petition was allowed, with no costs imposed. The court emphasized the importance of correct tax assessment and fair proceedings, ensuring that the petitioner's overpayment was duly considered and the matter was resolved with a fresh assessment order.