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of <h1>Court overturns erroneous assessment orders in favor of petitioners, emphasizes compliance with legal standards</h1> The court set aside the assessment orders challenged in writ petitions, finding them to be grossly erroneous and contrary to established legal principles. ... - Issues:Challenges to assessment orders on grounds of arbitrariness, irrationality, and violation of constitutional articles, mala fide exercise of power, incorrectness and incompleteness of return, flat rate assessment methodology, best judgment assessment based on electricity consumption, alleged monopoly creation, rejection of books of account, lack of documentary evidence, and violation of legal principles.Analysis:The writ petitions challenged assessment orders on various grounds. Firstly, the petitioners argued that the assessment was arbitrary, irrational, and violated constitutional articles 14, 19(1)(g), and 265. They further contended that the assessment was a mala fide exercise of power aimed at imposing disproportionate liability. The petitioners also claimed that the conditions for exercising power under section 12(2) were not met, as no objective facts were examined, and no evidence of purchase or sales omission was found.Moreover, the petitioners objected to the flat rate assessment methodology based on alleged energy consumption for sago and starch, arguing that it lacked independent support and was not established by proven methodology in the trade. They also criticized the use of a flat rate method for best judgment assessment, ignoring individual characteristics of each assessee. The petitioners emphasized that electricity consumption alone should not be the basis for assessment, citing legal precedents to support their argument.The petitioners, small-scale units manufacturing sago and starch, contended that the demands were raised without evidence of tax evasion and were allegedly influenced by a cooperative society to promote its interests. They highlighted their compliance with tax laws, maintenance of proper accounts supported by vouchers, and adherence to statutory requirements for sales and purchases. The petitioners also disputed the rejection of their books of account and the imposition of assessments based on generalized electricity consumption rates.In response, the Government Advocate acknowledged the flaws in the assessment orders, citing legal precedents that deemed the proceedings unsustainable. However, the Government Advocate suggested that the petitioners should have pursued alternative remedies before resorting to writ petitions. Despite this, the court found the assessment proceedings to be grossly erroneous and contrary to established legal principles, leading to the decision to set aside the impugned orders.Ultimately, the court allowed the writ petitions, setting aside the assessment orders, and granted liberty to the assessing officers to issue fresh orders in compliance with the law and legal precedents cited. The judgment emphasized the importance of upholding legal standards in assessments and ensuring fairness in tax proceedings, resulting in the closure of the connected pending matters without costs.
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