2015 (10) TMI 212 - HC - VAT and Sales Tax

Challenging Legality of VAT Notices: Specificity in Grounds, Best Judgment Assessments, and Natural Justice Principles

The appeal challenged the legality of notices issued under section 31 of the Haryana Value Added Tax Act, arguing for specificity in grounds for ... Evasion of tax - Held that:- A perusal of the findings recorded by the Tribunal shows that the assessee was given sufficient opportunity by the assessing authority before framing the reassessment. The list of documents impounded along with the bills and the details collected from the barrier were confronted to the assessee. It has been further recorded by the Tribunal that neither the books of account had been produced nor any reply to the show-cause notice was given by the assessee. Learned counsel for the appellant has not been able to show that findings are illegal or perverse in any manner. Thus, no substantial question of law arises - Decided against assessee. Issues:1. Legality of different notices issued for initiating proceedings under section 31.2. Validity of best judgment assessment when notice terms are complied with.3. Authority for best judgment assessment under the Value Added Tax Act.4. Best judgment assessment in reassessment with undisclosed turnover.5. Compliance with principles of natural justice in best judgment reassessment.6. Applicability of Supreme Court judgment in present circumstances.7. Interpretation of previous High Court judgment on best judgment assessment.8. Legality of penalty imposed for suppression.9. Levy of penalty on assumed turnover in best judgment assessment.Analysis:1. The appeal by the Revenue challenges the legality of different notices issued for initiating proceedings under section 31 of the Haryana Value Added Tax Act. The appellant argues that such notices must be based on 'definite information' and questions the validity of varied bases for the notices. The issue revolves around the requirement of specific grounds for initiating proceedings under section 31 and the permissibility of multiple notices with different subject matters.2. The controversy involves the validity of framing a best judgment assessment when the terms of the notice are complied with. The appellant contests the necessity of such an assessment when compliance is met. The issue delves into the legal framework surrounding best judgment assessments and the conditions under which they can be rightfully imposed.3. Another issue pertains to the authority for best judgment assessment under the Value Added Tax Act, specifically in the absence of explicit jurisdiction provisions. The appellant questions the basis for such assessments under the Act compared to previous legislation and seeks clarity on the legal foundation for best judgment assessments.4. The case also addresses the validity of a best judgment assessment in reassessment proceedings when turnover, though not disclosed in returns, was part of the balance sheet and books of account during the original assessment. The issue involves the treatment of undisclosed turnover in reassessment scenarios and the criteria for justifying best judgment assessments in such circumstances.5. An important aspect is the compliance with principles of natural justice in best judgment reassessment. The appellant raises concerns regarding the lack of opportunity for cross-examination and submission of written responses before the best judgment was framed. The issue focuses on procedural fairness in reassessment proceedings and the adherence to natural justice principles.6. The judgment of the Supreme Court in a cited case is brought into question concerning its applicability in the present circumstances. The appellant argues that the Supreme Court judgment favors their position, contrary to the respondents' interpretation. This issue involves the interpretation and application of relevant judicial precedents to the current case.7. The interpretation of a previous High Court judgment on best judgment assessment is also challenged. The appellant questions the observations made in the cited case and seeks clarification on whether best judgment assessments can be framed when the notice terms are complied with. This issue requires a detailed analysis of the previous judgment's relevance to the present case.8. The legality of the penalty imposed under section 48 of the Act for suppression is another issue raised in the appeal. The appellant contests the imposition of the penalty and questions its legality in the context of the alleged suppression. This issue involves an examination of the statutory provisions and the circumstances warranting penalties for suppression.9. Lastly, the appeal questions the levy of penalty on assumed turnover in best judgment assessment versus 'definite information' on undisclosed turnover. The issue concerns the basis for levying penalties in best judgment assessments and the criteria for determining the turnover on which penalties can be imposed.