2019 (5) TMI 1222 - HC - VAT and Sales Tax

Company Challenges Tax Assessment, Wins Partial Relief, Upheld on Appeal

M/s Kirat Hotels Pvt. Ltd. Versus Commissioner Of Commercial Taxes

M/s Kirat Hotels Pvt. Ltd. Versus Commissioner Of Commercial Taxes - TMI Issues involved:Assessment based on diary entries and loose papers, Re-assessment order, Appeal before Joint Commissioner (Appeal), Appeal before Tribunal, Revision against Tribunal's order.Assessment based on diary entries and loose papers:The applicant, a private limited company running a hotel with a restaurant and bar, faced assessment under the U.P. Value Added Tax Act, 2008 for the year 2005-2006. During a survey, entries in the manager's personal diary and 20 loose papers were discovered. The assessing authority rejected the books of account and declared turnover based on these materials, leading to a tax demand of Rs. 7,64,000. The applicant's explanations were not accepted, and a re-assessment order was passed taxing sales of wine and liquor. The first appellate authority reduced the tax demand to Rs. 15,97,331, considering the materials produced during the appeal.Re-assessment order:The re-assessment order created an additional tax demand of Rs. 16,57,448, focusing on the sales of beverages. The applicant contended that sales were made after paying excise and trade tax, presenting 20 loose papers during the first appellate proceedings to support their claim. The Joint Commissioner (Appeals) calculated the disputed tax amount at Rs. 21,08,543 and reduced it to Rs. 15,97,331 after evaluating reports and submissions.Appeal before Joint Commissioner (Appeal):The first appellate authority, after reviewing reports and submissions, partially allowed the appeal by reducing the tax demand to Rs. 15,97,331 from the initial assessment. The authority considered materials produced during the appeal, including the 20 loose papers, and made a decision based on the records presented.Appeal before Tribunal:Both the department and the applicant appealed the first appellate authority's decision before the Tribunal. The Tribunal partly allowed the applicant's appeal, dismissing the department's appeal. The liability was further reduced by Rs. 78,501. The revision was filed against the Tribunal's order dated 06.05.2008, challenging the decision.Revision against Tribunal's order:The revision was filed against the Tribunal's order, arguing that the lower authorities failed to consider the books of account and the loose papers produced by the applicant during the first appellate stage. The Tribunal's decision was based on the materials recovered during the survey and the applicant's disclosed turnover, leading to a reduction in tax liability. The revision was dismissed as no legal question was found, upholding the Tribunal's decision.This detailed analysis covers the assessment process, re-assessment, appeal stages, and the final revision against the Tribunal's order, providing a comprehensive understanding of the legal judgment.