2019 (12) TMI 931 - HC - VAT and Sales Tax

Ex-parte assessment - dispute between the petitioner and the tax consultant - Levy of turnover tax - EFS (Electronic Filing System) data collected by the prescribed authority indeed disclosed the turnovers of the petitioner - prescribed authority ought not to have levied tax on the petitioner concluding ex parte assessment for not producing the books of accounts - HELD THAT - It is clear that the EFS Data collected from the prescribed authority discloses the turnover of the petitioner. The petitioner is banking upon the intelligence report to take shelter on the alleged misuse of the password by his tax consultant. Moreover, it is not in dispute that the PCR filed by the petitioner against the said tax consultant is pending adjudication. It is the inter se dispute between the petitioner and the tax consultant. The turnover of the petitioner available on EFS data, cannot be ignored. In view of the inter se dispute between the assessee and the tax consultant or merely on the complaint made by the department against the tax consultant, the Revenue should not suffer. Hence, the assessments concluded by the prescribed authority respondent No.2 subjecting the petitioner to tax liability cannot be faulted with. Petition dismissed.

Summary

Issues:
Challenge to re-assessment orders and demand notices related to tax periods 2013-14.

Analysis:
The petitioner, a registered dealer under the Karnataka Value Added Tax Act, challenged re-assessment orders and demand notices issued by the respondent regarding tax periods 2013-14. The petitioner contended that there was no turnover during April 2013, while the EFS data collected by the prescribed authority showed turnovers. The petitioner claimed that their tax consultant misused their password to conduct business, leading to an intelligence team uncovering the issue. A complaint was lodged, and a case was pending against the tax consultant. The petitioner argued that tax should not have been levied based on ex parte assessment due to the ongoing dispute with the tax consultant.

The learned Additional Government Advocate supported the impugned orders. After hearing both parties and examining the evidence, the court found that the EFS data revealed the petitioner's turnover. Despite the petitioner's allegations against the tax consultant, the court emphasized that the ongoing dispute should not impact the revenue collection. Therefore, the assessments made by the prescribed authority subjecting the petitioner to tax liability were deemed valid. As a result, the writ petition was dismissed, granting the petitioner the liberty to appeal before the Appellate Authority if desired.