9911796707
TMI Blog2014 (12) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said to be in violation of principles of natural justice - as the dealers were not even available for examination by the concerned commercial tax officers, the question of making them available for cross-examination by the petitioner does not arise. Extension of benefit of input tax credit – Sale of goods on which input tax credit claimed or not - Would production of a tax invoice by itself, and without anything more, require a dealer to be extended the benefit of input tax credit and whether the assessing authority prohibited from enquiring whether or not the selling dealer had sold the goods for which input tax credit was being claimed – Held that:- The entitlement of a VAT dealer to claim input tax u/s 13(1), in view of Section 13(3) thereof, is only if he is in possession of a tax invoice - the mere fact that the dealer is in possession of the tax invoice does not preclude the assessing authority from ascertaining whether the selling dealer had, in fact, sold goods to the purchasing dealer; whether there was physical delivery of such goods; whether the tax invoice was issued by a registered VAT dealer; whether or not the transactions of sale are genuine, etc. If, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-appreciate the evidence, and come to a different conclusion on the same material, such an exercise would not be undertaken by this Court in Writ proceedings under Article 226 of the Constitution of India - If the material on record supports the conclusion of the assessing authority, and the findings arrived at by him are such as a reasonable man would arrive at on the material on record, this Court would refrain from interference. The material on record does support the conclusion of the assessing authority that inter-State purchases of edible oils were suppressed and documents were created as if the petitioner had purchased edible oils from dealers within the State and had made payment to them, when, in fact, they had not purchased edible oils from dealers within the State - The conclusion of the assessing authority that this modus operandi was only to illegally claim the benefit of input tax credit, thereby evade payment of the sales tax due to the Government on the sales made by the petitioner to other VAT dealers within the State, and is only to willfully evade payment of tax, are neither findings based on no evidence nor are such findings perverse - therefore, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from eight dealers who, at the time of the purchases, were all admittedly real and existing registered VAT dealers in the State with TIN numbers and had issued tax invoices in favour of the petitioner; they had also issued way bills obtained from the Commercial Tax Department; the first respondent held that, though these eight dealers were existing and registered VAT dealers in the State and had issued tax invoices clearly showing collection of tax, they had physically not sold the edible oils to the petitioner, and had only issued paper bills to them; the petitioner had purchased edible oils from outside the State of A.P and had sold the same within the State of A.P; they had used the bills issued by these eight dealers for claiming input tax credit on such sales; this finding of the first respondent is illegal, contrary to the facts, and based on mere assumptions, presumptions and conjectures; the petitioner purchased goods only from local registered VAT dealers; there were no inter-state purchases made by them; M/s.Sri Lakshmi Oil Traders, Jaggaiahpet had delivered groundnut oil to the petitioner through heavy vehicles only, and had issued tax invoices and way bills to them; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner by the same tankers through which they had obtained the same from outside the State; the first respondent also held that, though the vendor was situated at Nellore, payments were made by the petitioner at Proddatur; as per the instructions of their vendor, the petitioner had made payments by bank transfer to the vendors account at Proddatur; this cannot be a ground for rejection of the transaction; in the case of purchases made from M/s. Kaveri Oil Trading Company, Naidupet, the first respondent disbelieved the same on the ground that the selling dealer did not report the sales made to the petitioner, and the whereabouts of the proprietor of the said dealer was not known; these are not valid grounds for disbelieving the transactions; the first respondent disbelieved purchases made from M/s. New Sreenivasa Traders, Piler on the ground that, though the said dealer was a registered dealer, he was dealing in confectionary, atta, maida, dry chillies, tamarind, copra, spices etc; the tax invoices and the way bills issued by the said dealer clearly mentions edible oils; the registration certificate of the said dealer does not contain details of any commodities; in respect of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first respondent states that the petitioner is a registered dealer carrying on business in the sale of edible oils such as groundnut oil, pamolein, rice bran oil etc; based on the authorization dated 19.12.2011 issued by the Deputy Commissioner, he had visited the business premises and had verified the books of accounts produced by the petitioner; on verification, it was noticed that input tax credit claimed by the petitioner, in respect of seven dealers, was not in accordance with law; the handwriting in all the invoices was one and the same, and most of the invoices were issued by Sri Y. Rajendra Prasad and Sri K.L.N. Reddy who are third parties; in all these transactions, the petitioner made payments to the dealers in their accounts maintained at Proddatur, though none of the above firms were located at Proddatur; as he suspected their genuineness, he had issued a show-cause notice dated 06.03.2014 proposing to disallow input tax credit claimed by the petitioner; he had issued the show-cause notice after obtaining necessary authorisation from the Deputy Commissioner (CT) on 03.03.2014; the petitioner submitted their reply to the show-cause notice on 10.04.2014 and 24.04.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... originated from the places shown in the way bills; all these invoices and way bills are, therefore, liable to be treated as invalid; 35 transit sale transactions were verified with reference to GIS system data of VATIS, and it was found that the said lorries/tankers had been transporting edible oils from outside the State of Andhra Pradesh to other States through A.P. duly taking transit passes at entry check posts and surrendering the same at the exiting check posts; while the vehicles were on their inter-State movement, the same lorry/vehicle numbers were found on the sale invoices/way bills issued by the assessee through which they claimed to have transported edible oil to local registered dealers in Andhra Pradesh; as per the VATIS, the transit passes were surrendered and the tankers crossed the State border; in such a case, the petitioner could not have taken delivery of those tankers and resold the same; it cannot even be assumed that some local dealer took delivery of those goods, and resold them to the petitioner, as the said vehicle had crossed the State border by that time; the petitioner has not furnished any details of the first sellers of these goods in the State or o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s why he contended that the limitation was four years; and failure to refer to Section 21(5) of the Act, in the show- cause notice, is per-se immaterial. With regards the petitioners claim that the assessment for the years 2008-09 and 2009-2010 was barred by limitation, the first respondent, in the order of assessment dated 29.04.2014, held that limitation of four years is applicable to general cases, but was not applicable to cases of wilful evasion i.e., where a VAT dealer indulges in wilful evasion of taxes; in such cases six years is the period of limitation under Section 21(5) of the Act; since the petitioner had resorted to wilful evasion of tax as stated in the show cause notice, the assessment proposed for 2008-09 and 2009-10 was also within limitation. In Gunisetty China Gunna Raju Traders, Visakhapatnam (2013) 57 APSTJ 157 (AP) it was fairly conceded before the Division Bench, by the learned Special Government Pleader for Commercial Taxes, that the assessment from April 2005 to May, 2009 was beyond the period of four years mentioned under Section 21(4) of the Act. In these circumstances, the impugned assessment for the period from April 2005 to May, 2009 was declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to be found in the show cause notice. There is no averment that the duty of excise had been intentionally evaded or that fraud or collusion had been practiced or that the assessee was guilty of wilful misstatement or suppression of fact. In the absence of any such averments in the show-cause notice it is difficult to understand how the Revenue could sustain the notice under the proviso to Section 11-A(1) of the Act. 22. It was held that the show cause notice must put the assessee to notice which of the various omissions or commissions stated in the proviso is committed to extend the period from six months to five years. That unless the assesse is put to notice the assessee would have no opportunity to meet the case of the Department. It was held: 2.....There is considerable force in this contention. If the department proposes to invoke the proviso to Section 11-A(1) , the show-cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assesse would have no opportunity to meet the case of the department. The defaults ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crutiny of the accounts of any VAT dealer and where any assessment, as a result of such scrutiny, becomes necessary such assessment shall be made within a period of four years from the end of the period for which the assessment is to be made. Section 21(5) stipulates that, where any wilful evasion of tax has been committed by a dealer, an assessment shall be made to the best of his judgment by the authority prescribed within a period of six years of the date of filing of the return or the first return relating to such offence. If the allegations in the show-cause notice, accepted as true, show that the dealer had committed wilful evasion of tax, and the findings recorded in the assessment order establish that the assessee had wilfully evaded tax, it would suffice to extend the period of limitation in terms of Section 21(5) of the Act notwithstanding that the show-cause notice does not refer to Section 21(5) and does not specifically use the words willful evasion of tax. It is, therefore, necessary for us to refer to the contents of the show-cause notice. Pursuant to an audit of the books of accounts of the petitioner, the first respondent issued a notice on 06.03.2014 calli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claim input tax credit as the selling dealer was involved in fraudulent issue of invoices without transfer of property; and they had acted in collusion with the above said dealer, and had wrongly claimed input tax credit for which they were not eligible. With regards M/s. Sai Kendriya Trading Company, Nellore, the show cause notice records the report of the Commercial Tax Officer, Nellore that they had taken VAT registration for carrying on business in prawn seeds and aqua culture, but not for edible oils; the office records revealed that they had carried on business upto June, 2011 and had left the place of business without intimation; it was evident that the dealer had made sales of bills only; they had neither reported the turnover nor had they paid taxes to the department; it was clear that they had not sold edible oils to the petitioner; and the input tax credit claimed by them ought to be disallowed. The show cause notice further records that, on verification of the tax invoices and way bills attached thereto, it was clear that the petitioner had not purchased goods directly from M/s. Sai Kendriya Trading Company, Nellore, but through their agents at Proddutur i.e., M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted the sale transactions effected by them to the petitioner; on visiting their place of business, and on enquiry with their neighbours, it came to light that the whereabouts of the proprietor was not known; on further verification of the invoices produced by the petitioner it was noticed that they had not purchased goods directly from M/s. Kaveri Oil Trading Company, Gudur but through M/s. Sree Sai Trading Company, Proddutur and M/s. Sadguru Trading Company, Proddutur; the payments made against these purchases were in favour of M/s. Sri Kaveri Oil Trading Company, Proddutur branch instead of Sri Kaveri Oil Trading Company, Naidupet; the tax invoices made no mention of the existence of a branch at Proddutur nor were there any instructions, on the said invoices, that payment should be made in favour of Proddutur branch; it was evident that the petitioner did not purchase the goods from a registered VAT dealer, but from unknown persons; to cover up the same, the petitioner had produced tax invoices issued by third parties; the said tax invoices had no validity and sanctity, and the input tax credit claimed against those purchases were liable to be rejected; the way bills, enc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird party in the name of the registered dealer; and hence the said input tax invoices had no validity and sanctity. With respect to Sri Lakshmi Srinivasa Traders, Cumbum, the show cause notice records that the invoices were not issued by Sri Lakshmi Srinivasa Traders, but were signed and issued by Sri Y. Rajendra Prasad on behalf of M/s. Sadguru Trading Co. Proddutur/Sree Sai Trading Co., Proddutur who were not the registered dealer; Sri Y. Rajendra Prasad had signed and issued tax invoices for other firms also; these transactions were not accounted for in the returns of the registered VAT dealer; the tax invoices issued by third parties had no validity and sanctity; and the petitioner had not produced any evidence to show that they had made payment directly to the registered VAT dealer. With regards Sri Lakshmi Venkateswara Traders, Nellore, the show cause notice records the report of the CTO, Nellore that they had made false sales to the petitioner; they hardly effected any sales; on a visit of their premises, the proprietor of the firm was nowhere to be found; on enquiry, the neighbours informed that his whereabouts were not known; verification of the invoices showed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d having purchased edible oil from outside the State of Andhra Pradesh; the petitioner owned certain transport oil tanker vehicles 1). AP 16 W 4666, 2). AP 37V 2582, 3). AP 16 X 9569 and 4). AP 16 TV 9569 which were regularly utilised by them for transportation of edible oils; on verification of the books of accounts, along with the used triplicate copy of their way bills, certain lorry numbers were identified as having been used by the petitioner for transportation of edible oils sold by them to dealers in Andhra Pradesh; details of said vehicles, along with those of other oil tankers, were verified with the GIS system data of Value Added Tax Information Service (VATIS); it was found that the said lorries/tankers had been transporting edible oils from outside the State of Andhra Pradesh to other States through AP, duly taking transit passes at the entry check posts and surrendering them at the exit check posts; and, while the vehicles were on their inter-state movement, the same lorry/vehicle numbers were found on the sale invoices/way bills issued by the petitioner through which they had transported and sold edible oils to local registered dealers of A.P. The show cause notice g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to another VAT dealer; this implies that an invoice would be valid only if and when it is issued by a VAT dealer; if the invoice has been issued by a person other than a VAT dealer, it has no validity and sanctity; as per Section 55(2) of the A.P. VAT Act, any VAT dealer who issues a false tax invoice, or receives and uses a tax invoice knowing it to be false, shall be liable to pay a penalty of 200% of the tax shown in the false invoice; and, as such, the input tax credit claimed by the petitioner for ₹ 46,78,605/- was liable to be disallowed. The show-cause notice dated 06.03.2014 alleges that M/s. Sri Lakshmi Oil Traders, Jaggaiahpet had issued fraudulent sales tax invoices to accommodate input tax credit to the petitioner, and to enable them to avoid payment of output tax at their end; transfer of property had not taken place; the whereabouts of the proprietor of the selling dealer was not known; the petitioner was not eligible to claim input tax credit as the selling dealer was involved in fraudulent issue of invoices without transfer of property; and the petitioner had acted in collusion with the above said dealer, and had wrongly claimed input tax credit for whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax credit which they were not entitled to; and had, thereby, evaded payment of output tax legitimately payable by them to the State. The show-cause notice uses the word evade. The allegations in the show-cause notice, when read as a whole, are that evasion of tax by the petitioner is wilful, and not a mistake or an accidental omission. We are satisfied, therefore, that present case falls under Section 21(5) of the Act. As long as the source of power, to extend the period of limitation, is traceable to a statutory provision, the mere fact that the specific provision has not been referred to in the show-cause notice is of little consequence. If the power to do an act or pass an order can be traced to an enabling statutory provision, then, even if that provision is not specifically referred to, the act or order shall be deemed to have been done or made under the enabling provision. (Pine Chemicals Ltd. v.Assessing Authority). If the contents of the show cause notice show that the assessee had committed wilful evasion of tax, it matters little that Section 21(5) not been quoted therein. The jurisdiction to make assessment, under Section 21(5) of the Act, is only if the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddutur and M/s. Sadguru Trading Company, Proddutur, though their names were shown as agents in all the tax invoices which were issued; they had also not furnished any explanation for transfer of funds to Proddutur branch alone; if the sellers were really genuine, they were carrying on business at the registered place of business, and the petitioner had purchased goods from registered dealers only, they should have explained why they had transferred amounts/issued cheques to Proddutur branch; the tax invoices did not refer to the existence of a branch, of the respective selling dealers, at Proddutur; there was no instruction on the tax invoices that the funds be transferred to Proddutur branch; the petitioner had also not explained how the same person could sign and issue invoices of different firms located in different places, posing himself as the proprietor of those firms, and how an invoice signed and issued by a third person could be accepted as a tax invoice issued by the registered VAT dealer; the burden to prove that these invoices were signed and issued by the registered VAT dealer was on the petitioner; the question of summoning the selling dealer for cross-examination di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the petitioner claimed to have purchased edible oils, to be present before him for being subjected to cross-examination by the petitioner. Though such a request was made, it was not acceded to. Whether failure to summon the alleged selling dealers for cross-examination is in violation of principles of natural justice shall be examined hereinafter. Section 17 (3) of the Kerala Sales Tax Act, under which the assessment to sales tax had been made on the assessee in K.T. Shaduli Yusuff (1977) 39 STC 478 (SC), provided as follows: If no return is submitted by the dealer under subsection (1) within the prescribed period, or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall, after making such enquiry as it may consider necessary and after taking into account all relevant materials gathered by it, assess the dealer to the best of its judgment: Provided that before taking action under this sub-section the dealer shall be given a reasonable opportunity of being heard and, where a return has been submitted, to prove the correctness or completeness of such return. While examining the scope of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being heard before making best judgment assessment merely embodies the audi alterem partem rule and what is the content of this opportunity would depend, as pointed out above, to a great extent on the facts and circumstances of each case. The question debated before us was whether this opportunity of being heard granted under the first part of the proviso included an opportunity to cross-examine Haji Usmankutty and other wholesale dealers on the basis of whose books of accounts the Sales Tax Officer disbelieved the account of the assessee and came to the finding that the return submitted by the assessee were incorrect and incomplete. But it is not necessary for the purpose of the present appeals to decide this question since we find that in any event the assessee was entitled to this opportunity under the 'second part of the proviso. The second part of the proviso lays down that where a return has been submitted, the assessee should be given a reasonable opportunity to prove the correctness or completeness of such return. This requirement obviously applies at the first stage of the enquiry before the Sales Tax Officer comes to the conclusion that the return submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od. Here, it was not disputed on behalf of the Revenue that the assessee in both cases applied to the Sales Tax Officer for summoning Hazi Usmankutty and other wholesale dealers for cross-examination, but his application was turned down by the Sales Tax Officer. This act of the Sales Tax Officer in refusing to summon Hazi Usmankutty and other wholesale dealers for cross-examination by the assesse clearly constituted infraction of the right conferred on the assessee by the second part of the proviso and that vitiated the orders of assessment made against the assessee.. The first part of the proviso to Section 17(3) of the Kerala Sales Tax Act, which fell for consideration in K.T. Shaduli Yousuff (1977) 39 STC 478 (SC), required the dealer to be given a reasonable opportunity of being heard. The second part of the proviso required the dealer to be given a reasonable opportunity to prove the correctness or completeness of the return. While the Supreme Court held that the requirement of being given a reasonable opportunity of being heard, in the first part of the proviso to Section 17(3), merely embodied the audi alterem partem rule and it was not necessary for them to examine whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessing authority, on inspection and investigation, came to the conclusion that the said dealers were not genuine, and the assessee had manoeuvered to obtain certain bills to escape liability to tax. The assessee placed information before the CTO by means of challans etc. to prove that the aforesaid persons were genuine. The CTO refused to believe the evidence and imposed penalty. Against the order of penalty, the appellant preferred an appeal and the appellate authority set aside the order of penalty. Thereafter the Commissioner (CT), exercising the powers of revision under Section 20 of the Act, cancelled the order of the Appellate Deputy Commissioner and restored the order of CTO levying penalty. In his revisional order the Commissioner held that enquiries were made by the Department and a statement was recorded from the proprietor of the dealer who denied the genuineness of the sales, and from the proprietor of another dealer which disclosed that only paper bills were issued without sales. Before the High Court, the appellants contended that, in view of the evidence adduced by them regarding first sales suffering tax, they should have been given an opportunity to meet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (SC); Suresh Koshy George v. The University of Kerala ; Russel v. Duke of Norfolk ). Rules of natural justice are not embodied rules. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case and the framework of the law. Whenever a complaint is made before a Court that some principle of natural justice has been contravened, the Court has to decide whether observance of that rule was necessary for a just decision on the facts of the case. (Maneka Gandhi v. Union of India ; Suresh Koshy George [1969] 1 S.C.R. 317; D.F.O., South Kheri v. Ram Sanehi Singh ). It should not proceed as if there are inflexible rules of natural justice of universal application. Each case depends on its own circumstances. Rules of natural justice vary with the rules prescribed by the legislature. (M/s. Chingleput Bottlers v. M/s. Majestic Bottling Co.). One of the rules which constitutes a part of the principles of natural justice is the rule of audi alterem partem which requires that no man should be condemned unheard. This rule which requires an opportunity to be heard to be given to a person likely to be affected b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners. The show cause notice dated 06.03.2014 refers to the reports received by the first respondent from various commercial tax officers. With regards Sri Lakshmi Oil Traders, Jaggaiahpet, Krishna District, the CTO, Nandigama circle, in his report dated 30.04.2012, informed that he had visited the business premises mentioned in the registration report; no business activity was taking place therein; he had conducted a panchanama; the neighbours had stated that they had never seen any business activity and no business was being conducted by the proprietor Sri Jammula Gowri Shankar except for a painting board in the said premises. With respect to M/s.Sai Kendriya Trading company, Nellore, the CTO Nellore III, in his report dated 04.07.2012, informed that, on verification of the office record, it wa found that the dealer had carried on business upto June, 2011, and had left the place of business thereafter without intimation; and it was clear that the dealer had made sales of bills only, and had neither reported the turnover nor had paid tax to the Government. With respect to M/s.Kaveri Oil Trading Company, Naidupet, the CTO, Gudur circle, in his report dated 07.07.2012, info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on to the petitioner who is the second seller in the State; for claiming input tax credit, the second seller is only required to produce tax invoices issued by the first seller as per Section 13(1) of the Act; and where the first seller, a real and existing registered dealer, issues tax invoices and has not denied sale of edible oil to the petitioner, the department cannot treat such transactions as bogus transactions. Learned Counsel would rely on B. Narasaiah Co. v. State of A.P. (AP) and Harsha Jewellers v. CTO, Punjagutta Circle, Hyderabad , in this regard. With regards the petitioners claim that their sellers were duly registered and had filed monthly returns, which were produced in support of their claim of Input Tax Credit, and they had discharged the burden of proof for claiming ITC, the assessing authority, in the assessment order dated 29.04.2014, held that the invoice and way bills were not signed and issued by the registered VAT dealer, but by third parties; some of the tax invoices/waybills, of different VAT dealers, were signed and issued by the same person which could not happen in normal business conditions; they had no validity and sanctity and were li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the State does not shift the liability to pay tax on the second seller. In the light of these principles laid down by this Court, with which we are in respectable agreement, when we look at the facts of this case, it cannot be said that the petitioner failed to establish that he made the purchase from a real and identifiable dealer within the State. There is no controversy that Bantu Chinnaiah Co., Nizamabad, is a registered dealer under the provisions of the Act and its identity is also not in dispute. As rightly pointed out by the learned Special Government Pleader for Taxes, it is true that there is no satisfactory evidence placed before the Tribunal or before us to show that the vendor of the petitioner filed returns including the sale of turmeric in the turnover. However, the department assessed the tax on the gross turnover of ₹ 8,85,500 and determined the tax of ₹ 63,313.25 paise. The reason that the vendor of the petitioner did not pay the assessed tax cannot be a valid ground to disallow the claim of the petitioner. We say this because under the statute, if the vendor is alone is liable to be taxed and if he fails to discharge the said liability, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to mean a dealer who is registered for VAT. Rule 26 of the Rules relates to invoices and, under sub-rule (1) thereof, the invoices, bills or cash memoranda issued by a dealer shall be serially numbered for each year; and, in the case of the dealer, each of such invoice issued shall contain the particulars referred to in the said Rule. Among the particulars which a tax invoice is required to contain are (d) the date on which the invoice is issued; (e) the description of the goods supplied (f) the quantity or volume of the goods sold; (g) the basic price of the goods, the rate of tax, the amount of the tax, and the total sale price which is the sum of the basic price and tax amount. Rule 27 relates to tax invoice and, under sub-rule (1) thereof, a tax invoice, specified in Section 14, is required to contain the details specified in the said Rule. Among the details referred in Rule 27(1) are (d) the serial number of the invoice and the date on which the invoice is issued; (e) the date of delivery of the goods; (f) the description of the goods supplied; (g) the quantity or volume of the goods sold; (h) the rate of tax for each category of goods; (i) the basic price of goods s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods, is entitled to claim deduction of the tax paid by him, (while purchasing goods from a VAT dealer within the State), from the tax which he collects from the dealer to whom he has sold the goods; and to pay only the differential tax (the difference between output tax and the input tax). To the extent input tax credit is fraudulently claimed, there is a wilful evasion of tax payable by the assessee, as he has only paid the differential tax, and not the tax collected by him on the sale of goods to another. While the purchasing VAT dealer would not be entitled to claim input tax credit without obtaining a tax invoice from the selling VAT dealer, mere production of a tax invoice would not disable the assessing authority from enquiring whether the sale of goods, referred to in the said tax invoice, is genuine or bogus or whether the said tax invoice has been issued by a registered VAT dealer. While the eight dealers from whom the petitioner claimed to have purchased edible oils were registered VAT dealers, they were not carrying on business; some of them had not even registered themselves as carrying on business in edible oils; the tax invoices in their name were issued by third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an iota of evidence; the selling dealers are in existence; the petitioner had produced tax invoices; payment was made in its entirety, albeit in a different place where the vendor has a bank account; the petitioner discharged the burden of showing that they had received the goods and had made payment to their suppliers through bank account; and, as they had also produced the tax invoices, nothing more was required to be done at their end to claim the benefit of input tax credit. It must be borne in mind that the petitioner has invoked the jurisdiction of this Court, under Article 226 of the Constitution of India, against the assessment order passed by the first respondent without availing the statutory remedy of appeal. The tax authorities, entrusted with the power to make assessment of tax, discharge quasi- judicial functions, (K.T. Shaduli Yusuff (1977) 39 STC 478 (SC)), and their orders are amenable to judicial review under Article 226 of the Constitution. While a writ of certiorari is the appropriate remedy when the validity of a quasi-judicial order is under challenge, the petitioner has sought a writ of mandamus from this Court. It is necessary for us, therefore, to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight to compel the performance of some statutory duty cast upon the authorities. (Oriental Bank of Commerce (2008) 2 SCC 280). It is not even the petitioners case that the first respondent has failed to perform a statutory duty cast upon him or that the petitioners legal right, except for violation of principles of natural justice, has been adversely affected. The petitioners contention that the first respondent has exceeded his jurisdiction in assessing them to tax for the years 2008-09 and 2009-10, and failure to summon the selling dealers for cross-examination by the petitioner is in violation of principles of natural justice, have been dealt with earlier. The petitioner is, therefore, not entitled for a writ of mandamus from this Court. Even for a writ of certiorari to be issued, the tests prescribed therefor must be satisfied. Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted (i) without jurisdiction - by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction by overstepping or crossing the limits of jurisdiction, or (iii) acting in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the face of an order or decision or irregularity or absence of or excess of jurisdiction when shown. (T.C. Basappa AIR 1954 SC 440 ; Rex v. Northumberland Compensation Appellate Tribunal ; Hari Vishnu v. Ahmad Ishaque). However extensive the jurisdiction may be, it is not so wide or large as to enable the High Court to convert itself into a Court of appeal and examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made. (T.C. Basappa AIR 1954 SC 440 ; Veerappa Pillai AIR 1952 SC 192). Findings of fact reached by the inferior Court or Tribunal, as a result of appreciation of evidence, cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that, in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the show cause notice dated 06.03.2014, the petitioner submitted their objections by their letter dated 24.04.2014. The assessment order records that a personal hearing was provided on 25.04.2014 wherein the petitioner had reiterated the same grounds as were mentioned by them in their letter dated 24.04.2014; and they did not produce any material for the assessing authority to re-consider the findings in the show cause notice. In the assessment order dated 29.04.2014, the first respondent considered the objections of the petitioner that the first respondent had failed to establish the element of fraud or collusion between the selling dealers and the buying dealers, and held that the element of fraud or collusion was clearly established in this case as the dealer had produced invoices, which were found to have been issued by persons other than VAT dealers, based on which input tax was claimed; the cross verification reports, received from the jurisdictional assessing authorities, showed that none of the selling dealers were existing at the given place of business nor were those transactions accounted for in their books; as a purchaser, the petitioner cannot be unaware of these f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had prepared two statements. The first statement was of information regarding vehicles from outside the State which had passed through the State of A.P. to their eventual destination in another State using transit passes. Section 47 of the AP VAT Act relates to transit passes and, thereunder, where a vehicle carrying on goods coming from any place outside the State and bound for any other place outside the State passes through the State, the driver or other person-in-charge of such vehicle shall obtain, in the prescribed manner, a transit pass from the officer-in-charge of the first check post or barrier after his entry into the State, and deliver it to the officer-in-charge of the last check-post or barrier before his exit from the State, failing which it shall be presumed that the goods carried thereby have been sold within the State by the owner or person-in-charge of the vehicle and, accordingly, the tax shall be assessed and penalty, if any, shall be levied in accordance with the provisions of the Act. Under the proviso thereto where the goods carried by such vehicle, after their entry into the State, is transported outside the State by any other vehicle or conveyance, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner to deliver goods to other dealers within the State of Andhra Pradesh i.e., vehicles which were supposed to be in transit were the vehicles which carried goods sold by the petitioner to a VAT dealer within the State of A.P. Statement No.1 Transit Pass details Sl. No. Vehicle No. TP No. Date of TP issued Entry Check Post Exit Check Post Amount Rs. 1. GJ3Y8862 149909336933 25.03.2009 Chiragpalli Madanoor 842333 2. GJ6Y6355 1497093404521 26.03.2009 Madanoor Madanoor 837002 3. GJ6Y7395 1497093234961 28.02.2009 Madanoor BV Palem 797040 4. GJ12V7635 1497093234979 28.02.2009 Madanoor BV Palem 807840 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority concluded that the petitioner had purchased edible oils from outside the State and had sold them to dealers within the State; they were not entitled to claim input tax credit for the sales made by them (being the first seller in the State); and they had suppressed the inter-State purchases. The genuineness of the sale transactions of the eight dealers, from whom the petitioner claimed to have purchased edible oils and based thereon had claimed input tax credit, were also verified by the assessing authority. The assessing authority found that some of these dealers were not even carrying on business, and the whereabouts of their proprietors were not known; the tax invoices produced by the petitioner showed that the goods had not been purchased directly from M/s. Sai Kendriya Trading Company, Nellore, but through their agents at Proddatur i.e., Sri Sai Trading Company, Proddatur, and M/s.Sadguru Trading Company, Proddatur and were signed by one Sri K.L.N.Reddy. Sri K.L.N.Reddy is shown to have signed tax invoices of Sri Hari Traders, Tirupati also. The tax invoices of Sri Lakshmi Venkateswara Traders, Nellore, M/s. Kaveri Oil Trading Company, Naidupet, M/s. New Srinivasa T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
