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TMI Blog2018 (4) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... action there in no single checkpost records produced. The Assessing Officer cannot simply brush aside by stating that it is not his duty when heavy burden is cast upon the dealers and when the dealers are asked to prove the negative point. There is no other alternative except the Department to prove to provide all the required materials. Since the materials have not been provided after reasonable opportunity, it is concluded that the alleged purchase omissions by the dealers are not proved beyond doubt - There is no perversity in the finding of the Tribunal nor any illegality, warranting reversal. The issue as to whether reasonable opportunity has been given to the assessee, has been, held in favor of the assessee. Tax Case Revision is dismissed. - T. C. (R). No. 43 of 2018 - - - Dated:- 16-3-2018 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For Petitioner : Mr.V.Haribabu Additional Govt. Pleader (Taxes) ORDER ( Order of this Court was made by S. Manikumar, J. ) Tax Case Revision is filed to revise the order dated 25.02.2002 made in T.A.Nos.752 to 757 of 2001, 760 to 762 of 2001, 779 to 793 of 2001 and 944 to 946 of 2001, on the file of the Tamil Nadu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pre-revision notice, obtained objections from the dealers and confirmed the proposals in the absence of recorded evidence and the same is in order. 7. Learned Additional Government Pleader (Taxes), further submitted that the Tribunal ought to have seen that, the first appellate authority had sustained the order of revision made by the Assessing Officer in view of the fact that the dealers had failed to prove with recorded evidence, that they did not effect any sales of Groundnut from Karnataka Dealers. Further, the first appellate authority had categorically stated that reasonable and sufficient opportunities granted to the dealers were not utilised by them properly. Therefore, the first appellate authority had dismissed all the appeals filed by the dealers. 8. He further contended that the Tribunal erred in observing that the department was in possession of the extract sent by the Enforcement Wing Officers and nothing more than that is not acceptable, since it is for the dealers to prove with recorded evidence, that the transactions as mentioned in the revision notice, in the name of the dealers were actually not made. When this is not done, the revision made is quite justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the other State with Bill No., Date, Name of the selling dealer in the other State, quantity of groundnut supplied by the interstate seller in each bill, the value of the goods moved in each consignment and also the vehicle number in which the consignments were moved, etc., and thus showed evidence on record that the dealers have suppressed their purchases made from Karnataka dealers, it was left to the dealers to show that they were not the recipients of such goods. 13. He has submitted that the Tribunal has failed to note that in transactions of this type, the department cannot go after each and everyone of the dealer for each and every entries found in the accounts to prove that the individual items of transactions did indeed exist. To that extent, the officials of the department were able to lay hands on the materials evidencing suppression, which by itself is a matter of chance. Further, the extent of suppression cannot be correctly gauged, since there is every possibility of destruction of materials by evaders of tax at regular intervals on the transactions are over. 14. He also stated that the Tribunal ought not to have brushed aside the findings of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbers, weight and value of the consignments, dates and mode of despatch etc., secondly their objection to the re-assessment on the ground of a mere change of opinion is also misdirected. In the revisions the assessing authorities made use of substantive facts extracted from external sources that were not available the time when the first assessment was made and which could only be brought out after painstaking investigation by the enforcement arm of the department. That the appellants have made light of an otherwise weighty situation needs no elaboration. With these preliminary remarks which have gone entirely in favour of the department I go into the substantial aspect of appeal, namely, failure of the department to grant the appellants an opportunity or cross-examination. Asking for an opportunity to cross-examine witnesses under a sales tax law is assuming that the sales tax law of the State has expressly replicated in itself the provisions of the law of evidence. On the contrary an exploration can be made in the direction of finding out whether the law of evidence can be read into any part of the sales tax law. The Supreme Court of India in the case of State of Karnataka Vs. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice is the rule of audi alteram partem which requires that no man should be condoned unheard. This rule which requires an opportunity to be heard to be given to a person likely to be affected by decision is also, like the genus of which it is a species, not an inflexible rule having a fixed connotation. It has a variable cogent depending on the nature of the inquiry, the framework of the law under which it is held, the constitution of the authority holding the inquiry, the nature and character of the rights affected and the consequances flowing from the decision. It is, therefore, not possible to say that in every case the rule audi alteram partem requires that a particular specified procedure is to be followed. It may be that in a given case the rule of audi alteram partem may import a requirement that witnesses whose statements are sought to be relied upon by the authority holding the inquiry should be permitted to be cross-examined by the party affected while in some other case it may not. The procedure required to be adopted for giving an opportunity to a person to be heard must necessarily depend on the facts and circumstances of each case. In the words of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res of both the States have used identical language in drafting this provision. If will not be an exaggeration if I say it is an though one or the other is doing an encore. Now coming to the proverbial question whether or not a request for cross examination of the third party asked for by an assessee in line with the principles of natural justice, can be granted, the court has observed. It is clear on a plain natural construction of the language of this provision that it empowers the Sales Tax Officer to make a best judgment assessment only where one of two conditions is satisfied either no return is submitted by the assessee or the return submitted by him appears to the Sales Tax Officer to be incorrect adboubcinokete. It is only on the existence of one of these two conditions that the Sales Tax Officer gets the jurisdiction to make a best judgment assessment. The fulfilment of one of these two prerequisites is, therefore, a condition precedent to the assumption of jurisdiction by the Sales Tax Officer to make assessment to the best of his judgment. Now, where no return has been submitted by the assessee, one of the two conditions necessary for the applicability of section 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the return submitted by the assessee is incorrect or incomplete so as to warrant the making of a best judgment assessment. The question is what is the content of this provisions which imposes an obligation on the Sales Tax Officer to give and confers a corresponding right on the assessee to be afforded a reasonable opportunity to prove the correctness or completeness of such return . Now obviously to prove means to establish the correctness or completeness of the return by any mode permissible under law. The usual mode recognised by law for proving a fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to cross examine witnesses examined by the Sales Tax Officer. Thus, it is only for the limited purpose of complying with the provision of best judgment assessment whether it is the Kerala Act or two Tamil Nadu Act, in so far as it relates to the question of proving the correctness or completeness of the returns submitted by the assessee originally, the law of ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.4.2000 (Shri Nakoda Stores, Kumbakonam Vs. State of Tamil Nadu). They seem to suggest that the Tribunal is in full agreement with their view that in circumstances when a revision os assessment is made relying on the material gathered from third parties, the revision cannot be said to be validity made if the person affected has not been given an opportunity to cross-examine the third parties to establish that person's innocence. I am afraid the petitioners have not fully appreciated the facts leading to the sort of decision given by the Honourable Court. In that case, the court examined only the power of re-assessment and its exercise. The concern of the Court was whether the authority exercising the power of re-assessment could be said to have acted objectively in re-opening an assessment that had already become complete after consideration of certain facts, by a re-consideration of the same facts in a different color. If the answer was charge of opinion when a revision of assessment needed a much larger ground and harder stuff to sustain it. The petitioner was assessed to tax on their sales of skimmed milk powder purchased from various sources against C purchases were in fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 134. In the result, there is no merit in the appeals preferred by the petitioners. There is really no universality in the matter of application of the principle of audi alteram partem as validly amended by the Apex Court. That for the extension of this principle to revisional proceedings was not at all in the contemplation of the legislation. I also don't see any ambiguity in the material projected against the petitioners for the purpose of revision. The quid pro quo expected of the petitioners in the fact of such an aggression on their on their nodesty except a flat denial, which is a appallingly missing. This silence on the part of the petitioners has come as a blessing in disguise to the department. Had the quid pro quo been there, the action or non-action by the department would have made a telling impact on the outcome of any appeal. The legislative intention also was not to burden the department with a need to afford an opportunity first to the petitioners to discredit the evidentiary material rather than to spur the individual affected into action so that his innocence would at once be manifest for all to see. Had the latter been the case; the battle lines would h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Authorised Representative has expressed his fear that any remand order will not serve any purpose in the present circumstances. 8. The learned Authorised Representative has further filed a copy of this Tribunal order in TA.Nos.988/99, 597/99, etc., dt; 28.4.2000. In that order, the Tribunal has taken a view that merely on a extract of other State dealer, the revision of assessments cannot be made. All records pertaining to purchases and sales should be made available to the appellants to file his objection and also he must give an opportunity to cross examine. The revision was set aside by the Tribunal in the similar circumstances. So, he prayed that all appeals may be allowed since the Department is not possessing any materials other than the extracts and more extracts will not fix the responsibility on the dealer. 9. On the other hand, the learned State Representative (FAC) has contended that the Karnataka Assistant Commissioner has sent a list of purchases effected by the Tamil Nadu dealer from the Karnataka dealers. It is a reliable document and revisions made based on the extract is quite in order. He has further contended that it is clearly proved that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To suit the needs of some unscrupulous dealers they used the name of the well known dealers in Tamil Nadu. He has further pointed out that the bill number and date shown in the revision order is not the invoice number of the revision order. But the mediator bill which cannot give any reliability. It is not clear from the assessment order whether the consignors noted in the revision order are registered dealers and whether the bill noted in the order refers to invoice issued by a regular registered dealer. When revision notices were issued, all the appellants have demanded a copy of the records which has been verified by the Assessing Officer. They have demanded that merely giving bill number, date, address of the dealer will not be sufficient. They demanded xerox copy of the bills referred in the notice. If any statements have been obtained, they should be made available. They also demanded cross examination. All these requests have been turned out by the Assessing Officer. According to him, it is sufficient to give the details of bill number, date invoice etc. Before examining the correctness of their contentions, it is better first to refer to the Special Tribunal order in the id ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atleast cross-examination should be arranged. Section 16 of the Tamil Nadu General Sales Tax Act gives power to the Assessing Officer to make a revision of assessment. The revision of assessment must be based on acceptable data. Mere change of opinion is not sufficient to re-open. When all the facts were before the authority at the original assessment then revision is not proper. When account books of third party are carried on, it is the duty of the Assessing Officer to afford an opportunity to the assessee on whom the re-assessment is sought to be made to examine the party which should be done only if the Assessing Officer had summoned the party with account books as prayed by the assess (69 STC 229.). 16. The dealers turnover cannot be enhanced on the basis of entry found in the records of the third party or on submission made by the latter until and unless the dealer is given an opportunity of rebutting an evidence or cross examining the third party.(66 STC 292) (Supreme Court). 17. The Hon'ble Special Tribunal in T.C.(R) No.309 to 313/2001 dt 1.11.2011 in the case of Tvl. Sha Shawarlal Lakmichand, has framed certain guidelines for affording cross examination. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fix the liability. If the dealers have purchased the groundnuts then, the payment details would have been collected and made available to the dealers. If they have actually crossed all the checkposts, the details would have been furnished. 18. The Assessing Officer in his order has observed that it is not the duty of the Assessing Officer to find out whether each transaction crossed during the check post. There is also possibility of non-stopping at the check post. But here, the dealers are denying the purchases of transaction. The dealer cannot prove a negative point. It is only the Assessing Officer to prove the alleged suppressions. The learned State Representative in-charge has pointed out that the dealers have transactions with Karnataka dealers and they have even paid advance takes it some check posts which clearly shows that they are transporting with defective or with no documents. 19. But the learned State Representative is not in a position to prove that the alleged purchase omissions as per the extract have been proved as if they have passed through the check posts. Whenever the Check Post records are received from the Check Posts, they are found to be account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dealers are asked to prove the negative point. There is no other alternative except the Department to prove to provide all the required materials. Since the materials have not been provided after reasonable opportunity, we come to a conclusion that the alleged purchase omissions by the dealers are not proved beyond doubt. So we set aside the revision orders passed by the Various Assessing Authorities in these batch of appeals as the suppressions not proved. When we have not sustained the turnover in the revisional assessments, the penalty also gets automatically cancelled. 21. In fine, all the appeals are allowed. (emphasize by us) 19. Disputed questions of facts have been properly adverted to by the Tribunal. Evidence available on record has been analysed and material in support of the allegations have been found not furnished to the assessee to disprove the same. There is no perversity in the finding of the Tribunal nor any illegality, warranting reversal. 20. The issue as to whether reasonable opportunity has been given to the assessee, has been, held in favour of the assessee. 21. For all the above reasons, we are not inclined to accept the cntention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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