Court quashes tax assessment orders for arbitrary local purchase values, stresses compliance with legal requirements

The court quashed the assessment orders for the years 2011-12, 2012-13, and 2013-14, which were based on deemed assessment, due to the arbitrary estimation of local purchase values without proper segregation of transactions. The matter was remitted to the respondent for fresh orders in compliance with the law, emphasizing the importance of accurate record-keeping and adherence to legal requirements in tax assessments to ensure fairness and accuracy. The petitioner was required to remit a specified sum to the respondent by a set date, failing which would lead to the dismissal of the petition.

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Issues:
1. Assessment orders for the years 2011-12, 2012-13, and 2013-14 concluded on deemed assessment basis challenged.
2. Invocation of formulae for levying purchase tax without calling for segregation of transactions.
3. Challenge to the arbitrary estimation of local purchase liable for tax value.
4. Quashing of impugned orders and remitting the matter to the respondent for fresh orders.

Analysis:
1. The judgment pertains to three writ petitions challenging assessment orders for the years 2011-12, 2012-13, and 2013-14 concluded on a deemed assessment basis. The petitioner, a business dealing in pulses, grams, and wheat, engaged in various transactions including imports, consignment sales, and local purchases. The assessment was initiated following a surprise inspection, leading to the issuance of pre-revision notices. After dismissal of initial writ petitions, the petitioner submitted replies and underwent personal hearings, resulting in impugned orders on 31.10.2019, which are now being contested.

2. The core contention raised by the petitioner's counsel was the invocation of a formula for levying purchase tax without requiring the segregation of transactions. Despite maintaining accounts for all transactions, the respondent relied on arbitrary estimations rather than seeking specific details regarding local purchases. The judgment criticized this approach, emphasizing that if records were unavailable, the authority should resort to best judgment assessment instead of guesswork. Consequently, the impugned orders were quashed, and the matter was remitted to the respondent for fresh orders in compliance with the law.

3. The judgment highlighted the lack of necessity for guesswork in tax assessment, stressing the importance of accurate record-keeping and proper assessment procedures. By failing to request the petitioner to provide transaction details, the respondent's reliance on arbitrary formulas was deemed inappropriate. The court's decision to quash the impugned orders and remit the matter for reevaluation underscored the importance of adherence to legal requirements in tax assessments to ensure fairness and accuracy.

4. In conclusion, the judgment allowed the writ petition, provided the petitioner remitted a specified sum to the respondent by a set date. Failure to comply would result in the dismissal of the petition. The decision to quash the impugned orders and remit the matter for fresh assessment underscored the court's commitment to upholding legal standards and ensuring proper procedures in tax assessments. The judgment concluded without imposing costs, closing all connected miscellaneous petitions.

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