Purchase mismatch assessments must follow JKM Graphics safeguards before reliance on sellers' Annexure-II data is sustained.

Purchase mismatch assessments based on sellers' Annexure-II particulars could not be sustained where the Department relied on that data without following the safeguards in the JKM Graphics procedure and the contemplated centralised mechanism. The Court held that one-sided reliance on mismatch data was unsafe, particularly because a new module or methodology for such assessments was under contemplation and the impugned assessment did not conform to the earlier order in the same dispute. The revised assessment was therefore set aside, and fresh assessment was directed only after the new module became operative and in accordance with law.

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Issues: Whether the revised assessment made by relying on sellers' Annexure-II particulars, without adherence to the JKM Graphics procedure and the contemplated centralised mechanism, could be sustained.

Analysis: The assessment was founded on purchase mismatch data taken from the sellers' returns. The Court held that the JKM Graphics principle governed such mismatch-based assessments and that the Department's one-sided reliance on Annexure-II particulars, without following the required safeguards, was unsafe. It was also noted that a new module or methodology for such assessments was in contemplation, and the impugned assessment was not in conformity with the earlier order passed in the same dispute.

Conclusion: The revised assessment was unsustainable and was set aside. Fresh assessment was directed to be made after the new module became operative and in accordance with law.

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