Court quashes orders, allows writ petitions, remits case for fresh orders. Petitioner to pay Rs. 7,00,000.

The court quashed the impugned orders and allowed the writ petitions, remitting the case to the respondent for fresh orders. The petitioner was directed to pay approximately Rs. 7,00,000 without extension, with the remittance subject to the final order post-remand. Lack of evidence supporting purchase suppression allegations led to the court's interference. The remand order was contingent on the petitioner fulfilling the payment undertaking, with non-compliance leading to automatic recall of the order and dismissal of writ petitions. No costs were awarded, and connected miscellaneous petitions were closed.

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Issues:
Assessment finalization on deemed assessment basis, surprise inspection leading to impugned orders, lack of independent enquiry by respondent, sales and purchase suppression allegations, settlement under Samathan Scheme, quantification of liability, interference by the court, remand for fresh orders.

Analysis:
The petitioner, an assessee registered with the respondent, had their assessment finalized on a deemed assessment basis for the assessment years 2007-08 & 2008-09. Subsequently, a surprise inspection was conducted at the petitioner's business premises in March 2015 by the Enforcement Wing Officials, leading to the issuance of pre-revision notices and the impugned orders. The petitioner's counsel argued that the respondent did not conduct an independent enquiry and relied solely on the Central Excise Department's proceedings, which was acknowledged by the court. However, the court noted that the respondent's allegations included both sales and purchase suppression by the petitioner.

Regarding the petitioner's participation in the Samathan Scheme during the pendency of an appeal before the Tribunal (CESTAT), the court observed that the petitioner's choice to settle under the scheme indicated issues with their sales transactions. Despite this, the court refrained from conclusively determining the matter solely based on the settlement. The court emphasized that the petitioner's liability for sales suppression was quantified at approximately Rs. 7,00,000 in the impugned orders. The petitioner was directed to pay this amount to the respondent by a specified date without seeking an extension, with the remittance subject to the final order to be passed by the respondent post-remand.

The court found a lack of evidence supporting the allegations of purchase suppression, leading to its interference in the matter. Consequently, the impugned orders were quashed, and the writ petitions were allowed. The case was remitted to the respondent for fresh orders in accordance with the law, leaving all contentions of the petitioner open. However, the court made it clear that the remand order was contingent on the petitioner fulfilling the undertaking to pay Rs. 7,00,000 towards the demand. Failure to comply would result in the automatic recall of the order and dismissal of the writ petitions. No costs were awarded, and connected miscellaneous petitions were closed as a consequence of the judgment.

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