2020 (3) TMI 997 - HC - VAT and Sales Tax

Levy of Luxury Tax - concealment of sales - suo-moto power of revision - Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act - HELD THAT - Considering the view taken by the appellate authority as regards the acceptance of the seized documents for the purpose of the assessments made and the view taken by the revisional authority and the learned Assam Board of Revenue that the petitioner assessee failed to provide the required evidence to arrive at a conclusion that the information contained in the seized documents were related to some other hotel and were procured for the purpose of making a sale projection, we are required to examine whether the view taken by the appellate authority in the order dated 29.01.2015 can be termed to be erroneous order and prejudicial to the interests of the revenue . From the point of view whether there was any incorrect assumption of facts or incorrect application of law by the appellate authority in respect of the seized documents, we take note of that the appellate authority had rejected the seized documents by accepting the statement of the Manager (F A) of the petitioner assessee that the information contained therein relates to some other hotel and were obtained for the purpose of making a sales projection of the hotel before a financial institution. No further evidence had been brought in by the petitioner assessee that the information contained in the seized documents were of some other hotel and if yes, as to of which hotel, nor any evidence had been brought in that it was used for the purpose for making a sales projection before any financial institution for obtaining a loan - Merely because a stand was taken by the assessee, the burden of proof would not shift to the department. In such view, it would have to be construed that there was an incorrect assumption of facts by the appellate authority. The two circumstances required to exist for the purpose of invoking the suo-moto revisional power under Sections 36 (1) of the AGST Act and 82 (1) of the AVAT Act are present in the instant case and therefore we do not find any infirmity in the exercise of any suo-moto power by the Addl. Commissioner of Taxes in the order 28.10.2015. The contention of the petitioner assessee that in view of the provisions of Section 33(2)(b), providing for an appeal by the Commissioner against the appellate order, the suo-moto power of revision against such appellate order would not be maintainable, is liable to be rejected. Revision dismissed.

Issues Involved:
1. Validity of the assessment orders dated 10.11.2006.
2. Legality of the suo-moto revision by the Additional Commissioner of Taxes.
3. Requirement of further evidence to substantiate the petitioner's claims.
4. Applicability of Section 33(2)(b) and Section 36(1) of the AGST Act regarding appeals and revisions.

Detailed Analysis:

1. Validity of the Assessment Orders Dated 10.11.2006:
The petitioner, a star hotel, was assessed a total tax of ?2,72,72,199/- for various periods under the AGST Act, AVAT Act, and Luxuries Act. The assessments were made following a surprise inspection and seizure of documents, which the authorities believed indicated unaccounted sales. The petitioner contended that the documents were mere estimates for loan projections and not actual sales records. However, the Superintendent of Taxes rejected this argument, asserting that the documents were rationally beyond doubt and matched the business details of the petitioner.

2. Legality of the Suo-Moto Revision by the Additional Commissioner of Taxes:
The appellate authority initially interfered with the assessment orders, directing a reassessment. However, the Additional Commissioner of Taxes, exercising suo-moto revision powers under Section 36(1) of the AGST Act and Section 82(1) of the AVAT Act, quashed the appellate authority's order and restored the original assessments. The Additional Commissioner argued that the appellate authority erred in accepting the petitioner's contentions without sufficient evidence and that the assessments were based on substantial evidence from the seized documents.

3. Requirement of Further Evidence to Substantiate the Petitioner's Claims:
The Assam Board of Revenue dismissed the petitioner's appeal, emphasizing the lack of evidence supporting the claim that the seized documents pertained to other hotels and were used for loan projections. The Board noted that the petitioner failed to provide details of the hotels or any communication with financial institutions regarding the loan application. The burden of proof was on the petitioner, which was not met, leading to the conclusion that the appellate authority's rejection of the seized documents was incorrect.

4. Applicability of Section 33(2)(b) and Section 36(1) of the AGST Act Regarding Appeals and Revisions:
The petitioner argued that the suo-moto revision was not maintainable due to the provision for an appeal under Section 33(2)(b) of the AGST Act. However, the court held that the Commissioner has the discretion to choose between appealing and exercising suo-moto revision, provided the conditions of erroneous order and prejudice to the revenue are met. The Supreme Court's interpretation in similar cases supported this view, affirming that the Commissioner could revise any order, including appellate orders, under suo-moto powers.

Conclusion:
The court concluded that the appellate authority's order was erroneous and prejudicial to the revenue due to incorrect assumptions and lack of evidence. The suo-moto revision by the Additional Commissioner was justified, and the Assam Board of Revenue's judgment was upheld. The revision petitions were dismissed, affirming the legality and correctness of the suo-moto revision and the original assessment orders.

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