2020 (4) TMI 272 - HC - VAT and Sales Tax

High Court sets aside Central Sales Tax Act assessment order for 2006-07 citing flaws, mandates personal hearing

The High Court set aside the assessment order under the Central Sales Tax Act, 1956 for the period 2006-07 due to flaws in the examination of transactions ... Validity of assessment order - CST Act - period 2006-07 - inter-state sales or not - filing of Form 'C' Declarations - HELD THAT:- The impugned order is flawed on two aspects. Firstly, though the respondent has extracted the entire objections as part of the order itself, he concludes that the transactions would only be domestic sales notwithstanding that 'C' Form Declarations have been filed. He notes the position that the delivery address is out of State, but still persists in his conclusion that the sales are only domestic. The transactions have not been examined in detail as directed by the first Appellate Authority. The petitioner has placed on record at pages 18 to 87 of the typed set of papers, documents such as, purchase invoice and challans in relation to the transactions at issue, which are stated to be part of the records before the Assessing Officer. It was thus incumbent upon the Authority to examine the transactions minutely and then come to a decision as to whether the transactions were domestic transactions inter se the petitioner and the vendor or inter state sales. This exercise has not been done - It was also incumbent upon the Assessing Authority to have granted an effective opportunity of personal hearing. Petition allowed by way of remand. Issues: Challenge to assessment order under Central Sales Tax Act, 1956 for the period 2006-07.Analysis:1. The petitioner challenged an assessment order under the Central Sales Tax Act, 1956 for the period 2006-07.2. The first Appellate Authority remanded two issues to the Assessing Authority for de novo consideration based on the details provided by the authorized representative.3. The remand required a detailed examination of the transactions in question by the Assessing Authority.4. The petitioner was asked to produce documentary evidence related to inter-state and transit sales, and a personal hearing opportunity was granted.5. The petitioner responded with detailed explanations regarding the nature of transactions, emphasizing they were inter-state sales.6. The High Court found the impugned order flawed on two aspects: lack of detailed examination of transactions and ineffective opportunity for a personal hearing.7. The Court noted that the transactions were not thoroughly examined as directed by the Appellate Authority, and the Assessing Authority failed to determine whether the sales were domestic or inter-state.8. The Assessing Authority was criticized for not granting an effective opportunity for a personal hearing, as the petitioner was only asked to appear within 15 days without a fixed date and time.9. Consequently, the High Court set aside the impugned order and directed the petitioner to appear before the Assessing Authority for detailed examination and a speaking order of assessment within four weeks from the conclusion of the personal hearing.10. The Writ Petition was allowed in favor of the petitioner with no costs, and the connected Miscellaneous Petition was closed.