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of <h1>Court remands assessments for lack of support, overturns penalties based on minor discrepancy.</h1> <h3>M/s Bhagwati Steels Versus Commissioner, Commercial Tax</h3> M/s Bhagwati Steels Versus Commissioner, Commercial Tax - [2017] 98 VST 281 (All) Issues:1. Assessment proceedings for Assessment Years 2005-06 and 2006-072. Imposition of penaltyAnalysis:Assessment Proceedings:The revisions involved in this case relate to assessment proceedings for the years 2005-06 and 2006-07. The revisionist, engaged in the business of iron and steel, faced assessment and penalty issues. The Commissioner issued a circular regarding security deposit for steel importers under Section 8-C of the U.P. Trade Tax Act. The authorities conducted a search at the revisionist's premises, seized documents, and found discrepancies in security payment for imported iron and steel products. The assessing authority rejected the books of accounts and undertook a best judgment assessment. The revisionist argued that the security deposit was demanded lawfully and any discrepancies could have been rectified. The assessing authority's rejection of books and estimation of turnover lacked empirical support, leading to the court ordering a remand for a fair assessment based on logical reasoning and material evidence.Penalty Imposition:Regarding the penalty imposition, the court found that the circular provided provisions for rectifying security deposit errors. The revisionist's penalty was based on a mere difference of Rs. 200 per metric ton, which the circular allowed to be rectified at the entry check post. As the penalty was solely based on this discrepancy, the court deemed it unsustainable and set aside the penalty orders. Consequently, Revision Nos. 7 and 9 of 2011 were remanded for reassessment, while Revision Nos. 10 and 8 of 2011 were allowed in favor of the revisionist, overturning the penalty imposition.
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