2014 (5) TMI 836 - HC - VAT and Sales Tax

High Court sets aside Appellate Tribunal's orders in Tax Case Revision, emphasizes compliance with statutory requirements

The High Court allowed the Tax Case Revision, setting aside the Appellate Tribunal's orders and directing a fresh consideration by the Assessing Officer. ... Entertainment of additional evidence - Whether Tribunal is right in dismissing the appeal without considering the objection filed by the Department w.r.t. admissibility of new records before the Appellate Assistant Commissioner (CT) which is violation u/s 39-B(2) of the Tamil Nadu General Sales Tax Act, 1959 – Held that:- Judgment in State of Tamil Nadu v. Shah Moolchand Kasthurchand and Another [2009 (10) TMI 826 - MADRAS HIGH COURT] followed - Certain documents which were produced, considered and taken into account by the Appellate Assistant Commissioner while the appeal was heard were not produced by the assessee before the AO - Tribunal, without answering the said issue had proceeded to decide the appeal on merits and ultimately dismissed the appeal - A reading of the Appellate Assistant Commissioner's order does not indicate of any consideration with regard to application of the provisions of Section 39B(2) - The documents produced by the assessee before the Appellate Assistant Commissioner should not have been relied upon - Since Tribunal has also not considered the issue and there is no answer - Both the orders the Appellate AC and Tribunal set aside – Decided in favour of Revenue. Issues:1. Appellate Tribunal's dismissal of the appeal without considering the objection raised by the Department regarding new records' admissibility.2. Appellate Tribunal's deletion of first sales of assets, sundry receipts, and estimation of first sales of unserviceable articles.Analysis:Issue 1:The Revenue filed a Tax Case Appeal questioning the Appellate Tribunal's dismissal of the appeal without addressing the objection regarding the admissibility of new records. The Tribunal did not respond to the objection raised by the Revenue, which contended that the Appellate Assistant Commissioner should not have considered additional documents presented by the assessee during the appeal. The Revenue argued that the documents were in violation of Section 39-B(2) of the Tamil Nadu General Sales Tax Act. The Appellate Assistant Commissioner relied on these documents to favor the assessee without recording reasons as required by law. The High Court emphasized that the Appellate Assistant Commissioner must provide in writing the genuineness of documents and reasons for the failure to produce them before the assessing authority. The failure to do so affects the validity of the order passed by the Appellate Assistant Commissioner.Issue 2:The second issue pertains to the deletion of first sales of assets, sundry receipts, and estimation of first sales of unserviceable articles by the Appellate Tribunal. The Tribunal's decision was challenged by the Revenue, arguing that the Appellate Assistant Commissioner should not have considered these aspects without proper adherence to the provisions of Section 39B(2). The High Court reiterated the importance of complying with the statutory requirements and set aside both the orders of the Appellate Assistant Commissioner and the Appellate Tribunal. The matter was remitted back to the Assessing Officer for fresh consideration, emphasizing the need for proper examination of all relevant documents and records. The Court directed that all records, including additional documents submitted by the assessee, should be sent to the Assessing Officer for thorough review.In conclusion, the High Court allowed the Tax Case Revision, disposing of the matter by setting aside the previous orders and instructing a fresh consideration by the Assessing Officer. The judgment highlighted the significance of following procedural requirements and ensuring proper documentation in tax-related appeals to maintain fairness and transparency in the legal process.