2018 (10) TMI 1525 - HC - VAT and Sales Tax

High Court upholds Revisional Authority's order in sales tax assessment appeal for FY 2011-12

SHRI N.G. MEHARWADE Versus THE ADDL. COMMISSIONER OF COMML. TAXES, ZONE-II,

The High Court upheld the Revisional Authority's order in a sales tax assessment case for the financial year 2011-12. The appellant's appeal challenging ... Restoration of re-assessment dated 01.01.2013 made under Section 39(1) of the KVAT Act - suppression of purchase of arecanut, cigarettes and Guthka - Held that:- The suppression is not in dispute. When the suppression is not in dispute, the Appellate Authority ought not to have set aside the order passed by the Original Authority. When the Appellate Authority found that the order passed by the Original Authority is without considering any books of accounts, the Appellate Authority ought to have remanded the matter, but the same was not done. When the suppression is not is dispute, the Revisional Authority was justified in exercising the powers under the provisions of Section 64(1) of the KVAT Act, 1964. The order passed by the Revisional Authority is in accordance with law. The appellant has not made out any case to interfere with the revision order passed by the 1st respondent - petition dismissed. Issues:1. Discrepancies in sales tax assessment for the financial year 2011-12.2. Appeal against the order passed by the Deputy Commissioner of Commercial Taxes.3. Revisional proceedings initiated under Section 64(1) of the KVAT Act.4. Dispute regarding suppression of purchase details and tax liabilities.5. Applicability of legal judgments in the assessment proceedings.Analysis:1. The appellant, a registered dealer under the KVAT Act, filed an appeal against the order dated 17.01.2018, challenging the re-assessment for the tax periods in the financial year 2011-12. Discrepancies included unaccounted purchases of arecanut, tobacco products, and suppressed goods, leading to a revised assessment by the Deputy Commissioner of Commercial Taxes on 01.01.2013.2. The appellant appealed the Deputy Commissioner's order, which was set aside by the Appellate Authority. Subsequently, the Revisional Authority initiated suo-moto revision proceedings under Section 64(1) of the KVAT Act, based on the suppression of purchase details and tax liabilities identified during inspections.3. The Revisional Authority found the appellant had suppressed purchases of arecanut, tobacco products, and gutkha, leading to an increased tax liability. The Revisional Authority's order was challenged in the Sales Tax Appeal, arguing that the reduction of turnover by the Appellate Authority was justified, and the revision proceedings were unwarranted.4. The appellant contended that the Revisional Authority's order was erroneous and contrary to the material, emphasizing the need for substantial questions of law in the appeal. However, the Revisional Authority upheld the revision order, citing the undisputed suppression of purchase details and the justification for invoking Section 64(1) of the KVAT Act.5. Legal arguments centered on the applicability of judgments in similar cases and the interpretation of relevant provisions. The Revisional Authority's decision was supported by the Additional Government Advocate, emphasizing the revenue's interest and the necessity to address the suppression of accounts in the assessment proceedings.In conclusion, the High Court dismissed the appeal, ruling that the Revisional Authority's order was in accordance with the law due to the undisputed suppression of purchase details. The court found no substantial questions of law to warrant interference with the revision order, ultimately upholding the revised assessment for the appellant's tax liability in the financial year 2011-12.