1990 (1) TMI 297 - HC - VAT and Sales Tax

Court rules in favor of assessee in tax assessment case for AY 1975-76, deeming higher tax rate unjustified.

The Court ruled in favor of the assessee in a best judgment assessment case for the assessment year 1975-76. The imposition of tax on cashmilon at a ... - Issues:- Best judgment assessment for the assessment year 1975-76- Imposition of tax at different rates on the sale of cashmilon- Challenge to the tax rate by the Revenue- Applicability of previous decisions on the caseBest Judgment Assessment:The case involved a best judgment assessment for the assessment year 1975-76 where the disclosed turnover of the assessee was rejected, leading to the imposition of tax based on best judgment. The initial assessment was challenged by the assessee, resulting in a series of appeals and remands.Imposition of Tax on Cashmilon:A significant issue in the case was the imposition of tax on the sales of cashmilon at different rates. Initially taxed at 2%, the assessing authority later raised the tax rate to 7% in a subsequent assessment order. This change in tax rate was a point of contention between the assessee and the Revenue.Challenge by the Revenue:The Revenue contended that the tax rate of 7% imposed on cashmilon was justified as it was applicable at the time of the assessment order. However, the assessee argued that since the initial tax rate was not challenged by the Revenue in the first appeal, it should have been considered final, and the subsequent increase to 7% was not valid.Applicability of Previous Decisions:The counsel for the assessee relied on a previous decision by the Court to support the argument that if a tax rate is not challenged by the Revenue in the initial appeal stages, it becomes final. Drawing parallels with a similar case, the counsel emphasized that the order passed by the assessing authority should not have been altered after the case was remanded for determination of the turnover.In the judgment, the Court considered the arguments presented by both parties and referenced previous case law to conclude that the assessing authority was not justified in increasing the tax rate on cashmilon from 2% to 7% without the Revenue challenging the initial rate. The Court found in favor of the assessee, quashing the order passed by the Tribunal and setting aside the imposition of tax at the higher rate. The revision was allowed, and no costs were awarded.