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TMI Blog2024 (4) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of an estimate is without any basis in law. When the Appellate Authority had come to the finding that the officers in the survey did not carry out the quantification of the stock in the correct manner, there was no reason for the Appellate Authority to uphold the confiscation and penalty. There are no reason with regard to the delay in the confiscation and levy of penalty. In fact, the notice for confiscation was issued in August 2019, almost 10 months after the date of survey. This inordinate delay in issuing show cause notice goes to the root of the matter and is a factor to be considered - the delay leads to an inference that the authorities have acted in a callous manner. It is trite law that the burden of proof for imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to confiscation under Section 130 of the Act and levy of penalty under Section 122 of the Act. 4. In the second writ petition bearing Writ Tax No.1600 of 2022, the order dated December 3, 2022 passed by the respondent No.3 (being the Assessing Officer) and the order dated August 3, 2022 passed by the First Appellate Authority under Section 107 of the Act are under challenge. These orders have been passed under Section 74 of the Act for liability arising out of additional stock that was present with the petitioner. 5. In relation to Writ Tax No.916 of 2022, the issue to be answered is whether mere presence of additional stock would result in confiscation and subsequent penalty. 6. Counsel on behalf of the petitioner has relied on tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122. 15. On a plain reading of the allegations levelled against the petitioner with regard to the improper accounting of goods, the only stipulation contained in Clauses (ii) and (iv) of sub-section (1) of Section 130 can at best be invoked by the department, however, in the present case, even assuming for the sake of argument, that the goods were lying in excess of the goods in record, the case against the petitioner would not fall under Clause (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of valuation of supply of goods or services, however, in the present case, the valuation of the goods is required to be done in terms of the mandate of Section 15(1) read with Section 15(2) and read with Section 15(3). In the said Section 15 or the Rules framed thereunder, there is no prescriptions for valuation of the goods on the basis of eye estimation as has been done by the department and has been repelled by the appellate authority. The appellate authority has erred in repelling the valuation done on the basis of eye estimation, however, has proceeded to value the goods (although differently) at the appellate stage without resorting to the mandate and manner prescribed in Section 15 read with the Rules, thus, on that count also, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference that the authorities have acted in a callous manner. 11. This Court is of the view that the entire procedure followed by the authorities indicates not only a lackadaisical approach but also showcases the incompetence and inefficiency of the authorities that had carried out the survey in a shoddy manner and thereafter issued the show cause notice and passed order of confiscation and penalty belatedly. 12. It is trite law that the burden of proof for imposition of penalty and confiscation of goods is on the Department and the same cannot be done on estimates when it is clear that the Department could have carried out a physical verification based on counting and weighing of the goods. In light of the same, the entire finding with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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