Revisional tax orders need proper fact-finding and reasons before restoring assessments; remand and conditional account access followed.

A revisional authority in a VAT assessment matter must record adequate reasons and undertake proper fact-finding before restoring the assessing officer's turnover figure, especially where the taxable proportion of food and drink sales is in dispute. As the authority had not properly re-examined the basis for the percentage of taxable sales, the revisional order was set aside and the matter remanded for limited reconsideration. Pending fresh decision, the business was allowed to operate a frozen bank account on furnishing security, reflecting a balance between revenue protection and continuity of operations.

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Issues: (i) Whether the revisional order restoring the assessment could be sustained when the proportional turnover of taxable food and drink sales had not been properly re-examined and reasons were not recorded on the correctness of the assessing officer's figure. (ii) Whether the appellant could be permitted to operate the frozen bank account on furnishing security pending the revisional authority's fresh decision.

Issue (i): Whether the revisional order restoring the assessment could be sustained when the proportional turnover of taxable food and drink sales had not been properly re-examined and reasons were not recorded on the correctness of the assessing officer's figure.

Analysis: The revisional authority was justified in noticing that the first appellate authority had accepted the assessee's figures without proper verification. However, it did not record adequate reasons to support its own factual conclusion that the assessment made by the assessing officer was correct. In a matter turning on the appropriate percentage of taxable sales, the revisional authority was required to undertake the necessary fact-finding exercise before restoring the assessment.

Conclusion: The revisional order was not sustainable and was set aside; the matter was remanded to the revisional authority for limited reconsideration of the proportion of sales of food and drink items liable to VAT.

Issue (ii): Whether the appellant could be permitted to operate the frozen bank account on furnishing security pending the revisional authority's fresh decision.

Analysis: Since the tax dispute remained pending before the revisional authority, the Court balanced the interests of revenue and business continuity by requiring security before permitting operation of the account.

Conclusion: The appellant was permitted to operate the bank account upon furnishing a bank guarantee of Rs. 2,50,000/-.

Final Conclusion: The appeal succeeded to the limited extent of securing a remand for fresh fact-finding, together with conditional interim relief enabling the appellant to operate the bank account on furnishing security.

Ratio Decidendi: A revisional authority exercising fact-sensitive tax jurisdiction must record adequate reasons and undertake proper verification before restoring an assessment, and where such fact-finding is incomplete, the matter may be remanded for fresh consideration with appropriate interim safeguards.

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