2008 (2) TMI 827 - HC - VAT and Sales Tax

High Court sets aside tax assessment orders, remands for fresh determination, emphasizing due process and evidence.

SP. Chemicals Versus Assistant Commissioner of Commercial Tax, Sendhwa and others

The High Court allowed the petitions, setting aside the orders related to the assessment of tax and remanding the matter back to the assessing authority ... Whether any goods had been imported by the assessee-firm from outside the State and the said goods had been sold in the State? Held that:- As a matter of fact, the said plea raised on behalf of the assessee-firm had even found favour with the revisional authority, when it had chosen to accept the said plea for setting aside the penalty. If that were so the aforesaid plea qua the assessment of tax should have also been taken into consideration and was liable to be accepted. Another plea raised by the assessee-firm is that the assessment order had been passed behind the back of the petitioner-firm without there being any due service upon it. In these circumstances, without commenting any further on merits of the controversy, deem it appropriate to remand the matter back to the assessing authority for fresh determination with regard to the assessment of the tax only, since the order of penalty passed originally by the assessing authority has already been set aside.Present petitions are allowed. Issues: Assessment of commercial tax, assessment of entry tax, concealment of sales, penalty imposition, revision petitions, remand of the matter.Assessment of Commercial Tax: The judgment dealt with four writ petitions raising an identical controversy by two different assessees regarding the assessment of commercial tax. The petitioner, a proprietorship firm, had obtained temporary registration for a manufacturing unit but faced allegations of clandestine purchases and sales. The assessing officer completed the assessment based on a report by the scrutiny officer, leading to the imposition of a penalty. The petitioner challenged the assessment, and after a revision petition, the assessment order was set aside and remanded back to the assessing authority. However, a fresh assessment order was passed, leading to further disputes regarding due process and ex parte orders.Assessment of Entry Tax: Two writ petitions pertained to the assessment of entry tax for the same assessees. The assessment was based on allegations of sales of goods imported from outside the State. The revisional authority set aside the penalty due to lack of evidence but upheld the assessment order, citing concealment of sales. The petitioner challenged the revisional order, arguing that no material was provided by the department to prove the alleged sales of imported goods.Penalty Imposition: The penalty imposition was a significant issue in the judgment, with the assessing authority levying penalties based on alleged concealment of sales. The revisional authority set aside the penalty due to lack of evidence regarding import of goods, highlighting inconsistencies in the department's case.Revision Petitions and Remand: The petitioner filed revision petitions against the assessment order and the penalty imposition. The revisional authority disposed of the petitions through a common order, setting aside the penalty but upholding the assessment order. The High Court, after considering the contentions raised, remanded the matter back to the assessing authority for fresh determination solely on the question of tax assessment, given the setting aside of the penalty.In conclusion, the High Court allowed the petitions, setting aside the orders related to the assessment of tax and remanding the matter back to the assessing authority for a fresh determination solely on the tax assessment question. The judgment addressed issues of due process, evidence, and inconsistencies in the department's case, emphasizing the need for a fair and thorough assessment process.