2020 (4) TMI 69 - HC - VAT and Sales Tax

Evasion of Trade Tax - all materials not considered - principles of natural justice - HELD THAT - From perusal of the impugned order passed by the Commercial Tax Tribunal it is clear that while allowing the revision of the revenue they have not considered the entire material with corrective perspective. The Assessing Authority while exercising the best judgment has extrapolated the figures and assessed the evasion of the total turnover to ₹ 5 Crores as well as this aspect of the matter has not even dealtwith by the Commercial Trade Tax Tribunal which goes to the root of the matter and this is the reason we deem it proper to remand the matter back to the Tribunal for reconsideration of the claim made by the revisionist. The matter is remanded back to the Commercial Tax Tribunal to pass a fresh order after reconsidering the issues raised by the concerned parties - Revision allowed by way of remand.

Issues:
Assessment of tax evasion based on survey, Appeal against Assessing Authority's order, Tribunal's consideration of evidence and arguments, Proper application of mind by Tribunal, Remand for reconsideration by Tribunal.

Assessment of Tax Evasion Based on Survey:
During the assessment year 2002-03, a survey revealed potential tax evasion by the revisionist in the purchase of Wheat. The Assessing Authority issued a show cause notice, leading to the determination of an evasion of ?5 crore in turnover. The revisionist's appeal to the Joint Commissioner (Appeals) resulted in a reduced evasion amount of ?1 crore. The Tribunal, in the impugned judgment, dismissed the revisionist's appeal and upheld the Assessing Authority's order based on findings of unrecorded transactions indicating an intent to evade tax.

Appeal Against Assessing Authority's Order:
Both the Revenue and revisionist filed appeals under the U.P. Trade Tax Act before the Trade Tax Tribunal. The Tribunal, in its judgment, favored the Revenue's appeal and rejected the revisionist's appeal, upholding the Assessing Authority's order of ?5 crore turnover for tax evasion. The Tribunal considered the Assessing Authority's examination of the revisionist's books of account and unrecorded transactions as evidence of tax evasion.

Tribunal's Consideration of Evidence and Arguments:
The Commercial Tax Tribunal, in the second appeal, reviewed the orders of the Assessing Authority and the first appellate authority. It found discrepancies in the assessment and set aside the first appellate authority's decision, upholding the Assessing Authority's order. However, the Tribunal's judgment was challenged on grounds of not fully considering the revisionist's arguments and evidence, leading to a lack of proper application of mind.

Proper Application of Mind by Tribunal:
The revisionist contended that the Tribunal failed to address critical aspects of the case, such as the extrapolation of figures by the Assessing Authority and the absence of a survey report dated 10.04.2002. The Tribunal's judgment was criticized for upholding the Assessing Authority's order without a comprehensive review of all relevant material and claims made by the revisionist.

Remand for Reconsideration by Tribunal:
Upon review, the High Court set aside the Tribunal's order and remanded the matter back for reconsideration. The Court noted the Tribunal's oversight in fully evaluating the revisionist's contentions and directed the Tribunal to reexamine the issues raised by both parties. The Court emphasized expeditious resolution within six months and instructed the revisionist to cooperate with the Tribunal's proceedings.

In conclusion, the High Court allowed the revision, emphasizing the need for a thorough reconsideration by the Tribunal to address the discrepancies and ensure a fair assessment of the tax evasion allegations.

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