2022 (9) TMI 161 - HC - VAT and Sales Tax

Tax Revision Dismissed: Court Upholds Turnover Assessment for 1991-92 Under A.P.G.S.T. Act, Citing Insufficient Evidence.

M/s VEEKAY OIL PRODUCTS Versus STATE OF AP REP. BY SR BEFORE STAT & 3 ORS

The HC dismissed the Tax Revision Case concerning the assessment of escaped turnover for the Assessment Year 1991-92 under the A.P.G.S.T. Act. The Court ... Violation of principles of natural justice - Acceptance of extracts obtained from the check posts without any corroborative evidence in support thereof by Sales Tax Appellate Tribunal (STAT) - Affirmation of estimation of turnovers with reference to sales with no corresponding consumption of power - denial of opportunity to the Petitioner for cross-examination of witnesses - HELD THAT:- The stated “Question of Law” was fairly discussed by a Division Bench of this Court in M/S VEEKAY OIL PRODUCTS VERSUS STATE OF A.P. [2015 (4) TMI 1345 - TELANGANA HIGH COURT], which was dismissed on 07.04.2015, confirming the judgment of the Appellate Deputy Commissioner and the Sales Tax Appellate Tribunal - The Division Bench held that The assessment order clearly speaks with reasons that was confirmed by the Appellate Deputy Commissioner of said version is untrue from the recorded evidence, but intentionally for evasion of tax by filing Nil returns or returns with utterly low turnover, there is for this Court while sitting in revision against the impugned order of the Sales Tax Appellate Tribunal in the two respective revisions nothing to interfere. Since the issue on hand is identical to the one decided by a Division Bench of this Court, which according to the learned Counsel for the Petitioner, has become final and as the same is not challenged; the present Tax Revision Case is dismissed. Issues:1. Assessment of escaped turnover for the Assessment Year 1991-92 under the A.P.G.S.T. Act.2. Validity of the estimation of turnovers by the Sales Tax Appellate Tribunal.3. Denial of opportunity for cross-examination of witnesses by the Sales Tax Appellate Tribunal.Issue 1: Assessment of Escaped TurnoverThe case involved a revision filed under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 by the Assessee, M/s. Veekay Oil Products, against the Order of Assessment made by the Commercial Tax Officer for the Assessment Year 1991-92. The Assessee was assessed for a net turnover, but certain sales were not reported in the monthly returns. Despite a notice to produce books of accounts, the Assessee claimed records were destroyed in a fire accident. Subsequently, a best judgment assessment was proposed and confirmed, leading to the filing of an appeal and the present Tax Revision Case.Issue 2: Validity of Turnover EstimationThe Assessee raised questions regarding the acceptance of extracts from check posts without corroborative evidence, the estimation of turnovers without corresponding power consumption, and denial of an opportunity for cross-examination by the Sales Tax Appellate Tribunal. However, a Division Bench dismissed similar questions in a previous case, stating that estimation based on electricity consumption is permissible only when there is no other evidence establishing a direct nexus between electricity consumption and turnover. The Bench found the estimation justifiable, considering the Assessee's failure to provide necessary documents and the lack of material to dispute the transactions.Issue 3: Denial of Cross-Examination OpportunityThe Assessee contended that the Sales Tax Appellate Tribunal erred in denying an opportunity for cross-examination of witnesses. The Division Bench clarified that cross-examination is not an absolute right and can be allowed only if necessary material is presented. In this case, the Tribunal's decision to uphold the estimation of turnovers based on available evidence, including check post extracts and bank information, was deemed appropriate. The Assessee's failure to provide weigh bills and account for their use, coupled with unsubstantiated claims of record destruction, led to the dismissal of the revisions.In conclusion, the High Court dismissed the Tax Revision Case, citing the finality of a previous judgment on similar grounds and the lack of challenge to that decision. The Court found no reason to interfere with the Tribunal's decision, emphasizing the importance of providing substantial evidence to contest assessments under the A.P.G.S.T. Act.