Verification of business premises before assessing stock difference was required; assessment order was set aside.

The Madras HC considered whether an assessment based on alleged stock difference could stand without verifying the assessee's godown and place of business. The assessee had produced material asserting that the godown existed and stock details had been furnished, while the authority relied on earlier records to dispute that position. Because objections had been received, the authority was required to verify the business premises before concluding that the stock difference justified tax and penalty. The existence of the premises was relevant to correct VAT liability. The assessment order was therefore set aside and the writ petition was allowed.

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Issues: Whether the assessment order was liable to be set aside for failure to verify the petitioner's godown and place of business before determining the tax liability.

Analysis: The dispute arose from an allegation of stock difference and a consequent demand of tax and penalty. The petitioner placed material before the authority claiming that the godown existed and that stock details had been furnished, while the authority relied on the earlier records to dispute the existence of the godown. Since the impugned order was passed after receipt of objections, the authority ought to have verified the godown and the place of business before concluding that the stock difference justified the demand. The existence of the business premises was relevant to the correct determination of VAT liability.

Conclusion: The assessment order was set aside and the writ petition was allowed in favour of the assessee.

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