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TMI Blog2019 (3) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... a reality that the Assessing Authority failed to appreciate the submission made by the appellant with evidences in three files on 19.03.2018 without making further enquiry or investigation thereupon framed the heavy handed tax liability. Such act of the Assessing Authority is a clear breach of principle of natural justice and law. Even First Appellate Authority without appreciating the facts, law and submission made by the appellant, mechanically passed the orders directing the appellant to pay 25% of total dues towards pre-deposit for all above three appeals, does not seem to be fair and reasonable. Since First Appellate Authority has dismissed the appeals summarily on ground of non-payment of pre-deposit without gone into the merits of the case, we decide to remand these matters back to First Appellate Authority for a fresh hearing on merits with direction to produce a copy of challan of ₹ 10,00,000/- before First Appellate Authority - Appeal allowed by way of remand. - SECOND APPEAL NOS. 1556 TO 1558 OF 2018 - - - Dated:- 7-3-2019 - Mr. A.P.Bhojak, President (I/C) AND Mr. A.H.Thakkar, Member For the Appellant : Mr.Nayan Sheth, the learned Advocate For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that against the aforementioned dues, appellant paid ₹ 16,13,899/- at the time of enforcement visit by officer of State Tax Department, challans thereof are annexed at Page Nos.62 to 66 of this paper book. He submitted that appellant paid ₹ 5,35,415/- on 18.08.2018 as per the statement on Page No.99 and copies of challans are annexed at Page Nos.100 101 of paper book. Mr.Sheth further submitted that subsequently, State Tax Authority recovered ₹ 18,93,608/- and ₹ 2,69,000/- through bank attachment from appellant. Mr.Sheth submitted that in all appellant has paid ₹ 43,11,922/- against aforementioned tax liability of ₹ 2,54,45,421/-, which approximately comes to 17% of tax liability. (3) Mr.Sheth submitted that keeping above stated basic facts in view, entire history of above mentioned assessments started from 27.10.2017. He submitted that prior to enforcement visit by the departmental officer, one of the officer, namely, Mr.R.M.Prajapati visited business place of appellant on 27.10.2017 and no discrepancy was noticed by this officer. He submitted that on 12.02.2018, officers of State Tax Department visited the business premises and impounded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of said show cause notice is annexed at Page No.102 of the paper book. Mr.Sheth submitted that pursuant to letter dated 11.09.2018, the appellant by its letter datad 12.09.2018 requested for 15-20 days time due to consultant of appellant was busy in some religious function, the said letter is annexed at Page No.106 of the paper book. Mr.Sheth submitted that without considering the request of appellant dated 12.09.2018, the authority passed orders of assessment on 19.09.2018 is injudicious and arbitrary manner framing heavy handed tax liability without considering the submission of appellant. (4) Mr.Sheth submitted that considering the above stated list of dates and events, it clearly reflects that appellant has extended fullest cooperation in assessments but Assessing Authority failed to appreciate the submission and request of appellant for further time and passed heavy handed orders on 19.09.2018, is against the principle of natural justice and law. He submitted that though appellant had extended cooperation in assessment but according to learned Assessing Authority, appellant failed to produce the accounting record in support of its contentions, is actually incorrect. Mr.She ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders passed in breach of principle of natural justice, therefore, they are required to be set aside. (8) Even on the merits of the cases, Mr.Sheth submitted that right from the date of visit, the appellant has consistently stated that the transactions reflected in the computer did not relate to actual sale. The attention of the Tribunal has been drawn towards the submission given at the time of raid on 14.02.2018, which is at Page Nos.54 to 59 of the paper book clarifies that the alleged sales transactions related to estimated sales, promotional expenses, expenses for employees etc. are not actual sales. Mr.Sheth submitted that the appellant has submitted the evidences in support of such claims at the time of raid itself as can be seen from the statement. (9) Mr.Sheth pointed out that when a secret visit was made at the premises of the appellant by the learned officer, Mr.R.M.Prajapati on 27.10.2017, it was noticed by him that guests were not allowed to enter in the dining area without making the payment based on bills issued by appellant. Thus, it clarifies that every sale was effected by issuing the invoices only. Mr.Sheth drew the attention of this Tribunal to the wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submitted that once the submission along with the supporting evidences are submitted to Assessing Authority, then it becomes the duty of the Assessing Authority to consider such submission by making proper inquiry but unfortunately here, Authority has failed to discharge its duty to inquire and appreciate genuineness of submission made by appellant. He submitted that the assessment orders passed without considering the evidences produced before the learned Assessing Authority are not sustainable in eyes of law. Mr.Sheth has placed his reliance upon the decision of the Hon ble Gujarat High Court in the case of Keshavlal Jivraj V/s. State of Gujarat 2016 GSTB GH 354, whereby the Hon‟ble High Court has laid down the law that in absence of evidences, enhancement in turnover of sales is not sustainable in eyes of law. (11) With regard to assessment orders, Mr.Sheth pointed out that the principal reason which has weighed with the learned officer for claiming the estimated sales as suppressed sales is that in the sales recorded in the books of accounts, there are specific identifications stated by mentioning RAJW/Year . which is not found in transactions found in the hidden f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.67 to 69 of the paper book, the appellant had categorically submitted that the transactions in the computer disc did not relate to sales. Mr.Sheth submitted that under law, no dealer is required to deposit tax except the tax payable as per its self-assessment or the order passed by an officer. He submitted that though no tax on the alleged suppressed sales was admitted in the returns nor any order was passed against it, still the appellant had made payment which according to Mr.Sheth cannot be a basis for an adverse conclusion against it. (15) According to Mr.Sheth, the learned Assessing Authority has also relied upon the alleged statement dated 16.02.2018 of appellant expressing surprise over the suppressed sales of ₹ 1,64,62,026/- for which it has not been given any information to conclude that the appellant has tried to mislead him. With regard to above submission, Mr.Sheth drew the attention of bench on Page No.54 of the paper book wherein nothing has been stated to that effect as alleged in the assessment orders. He submitted that the learned Enforcement Officer was relying upon the retracted file from the computer disc and therefore, initially not being aware about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position under Section 14 D of the GVAT Act. He submitted that during the surprise visit, it was found that the appellant has evaded the tax by unaccounted sales and deleted the data of cash sales‟ from the computer. He submitted that it was also found that the sales made by way of transactions connected with Addmark Hospitality Marketing Services‟s Coupon has not been accounted and tax was not complied upon such transactions. He submitted that during the surprise visit of Enforcement Team, the computer system was impounded and the data was recovered from the hard disc of computer with the help of experts and such transactions were not matching with accounted entry, therefore, assessment proceedings were started. He submitted that since appellant was indulged in tax evasion, therefore, State Tax Officer-3, Unit-9, Ahmedabad initiated proceedings to cancel the permission to pay lump sum tax under Section 14 D of the Act with effect from 01.04.2015. He further submitted that the assessment of appellant was completed by Assessing Authority as normal dealer and subsequently, the demand of ₹ 5,24,86,026/- for accounting year 2015-16, ₹ 5,31,57,392/- for accounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions and therefore, it was rightly rejected by the learned Assessing Authority. Thus the explanation of appellant does not have any merit. (24) Learned Government Representative submitted that the appellant has failed to produce bills for the discount given by it and therefore, the claim of estimates‟ given by appellant cannot be accepted. According to learned Government Representative, when appellant himself has made the payment of tax at the time of visit, therefore, the contention that it is not suppressed sales cannot be accepted. The learned Government Representative also relied upon agreement with Addmark Hospitality Marketing Services to support the assessment orders passed against the appellant. (25) Learned Government Representative submitted that appellant could not explain with regard to actual sales, projected estimates, promotional activity and publicity sales and supply of free food to the guests and entry in the restaurant with supportive evidences, therefore, liability framed by the Assessing Authority is just and proper. He submitted that theory of estimates‟ is not acceptable to him. He submitted that such transactions and estimates were record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple of natural justice is not violated. He submitted that based on the evidence derived from the computer of appellant, Assessing Authority has passed the orders after giving the show cause notice to appellant, therefore, it is speaking and reasoned orders. (28) Mr.Pujara finally submitted that considering the aforementioned submissions, Hon‟ble Tribunal may exercise its powers under Section 73 (4) only after payment of tax as provided in Section 73 (4). He submitted that while deciding the amount of pre-deposit, the intention of legislature should not be avoided. He urged that considering the prima facie case of appellant, the discretion may not be used in favour of appellant while directing the pre-deposit amount. We have considered the rival submissions, facts and also gone through the contents of the orders passed by the lower authorities. We have also considered written submission produced and decision relied upon by both the parties. Since the First Appellate Authority has also dismissed the appeals summarily on ground of non-payment of pre-deposit, the limited issue before us is to determine the pre-deposit amount for admission of the appeals, so we will not go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority should have granted further opportunity of hearing to appellant before passing any orders against it. It also appears from the submission of Mr.Sheth that appellant had submitted files of evidences with reply submitted on 17.03.2018 which are annexed as Annexue-E at Page Nos.71 to 85 of paper book. It shows that the attitude of appellant was duty bound. By not giving the further hearing by Assessing Authority, the principles of natural justice have been breached. (C) It appears that in support of its contentions, the appellant not only gave the written submission but also provided the list of such transactions and evidences in support thereof is acknowledged by office of the Assessing Officer on 19.03.2018 with three files, copy of letter is annexed at Page No.85 of the paper book. In our view, when appellant had produced evidences in support of its contentions, duty was on the learned Officer to verify their correctness by making proper investigation. Considering the narration of assessment orders, unfortunately, Assessing Authority has failed to verify the correctness of documents submitted by appellant. It was an onus of Assessing Authority to verify the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directing the appellant to pay 25% of total dues towards pre-deposit for all above three appeals, does not seem to be fair and reasonable. Therefore, based on the factual and legal discussion and considering the prima facie case, we believe that the direction of the First Appellate Authority to the appellant to deposit 25% of the total demand is not justified. Since the appellant has paid ₹ 43,71,922/- as against the tax liability of ₹ 2,54,45,421/-, is an approximate payment of 16.9% of tax dues, therefore, we have very limited space for further direction towards pre-deposit. In our considered view, it will be in the interest of justice and revenue to direct appellant to deposit ₹ 10,00,000/- for all above stated appeals towards pre-deposit within one month from today. On payment of aforementioned amount, stay against recovery shall come into operation. Since First Appellate Authority has dismissed the appeals summarily on ground of non-payment of pre-deposit without gone into the merits of the case, we decide to remand these matters back to First Appellate Authority for a fresh hearing on merits with direction to produce a copy of challan of ₹ 10,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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