Assessment Order Quashed, Case Remanded for Fresh Review; Emphasizes Natural Justice, Invoices & Cross-Examination Required.

The HC quashed the impugned assessment order for AY 2013-14, remanding the case to the respondent for a fresh review. The court emphasized adherence to Circular No.05 of 2021 and principles of natural justice, requiring the respondent to furnish invoices, allow cross-examination of dealers, and investigate misuse of the petitioner's name. The Writ Petition was allowed without costs.

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Issues:
The judgment deals with the demand confirmation for Assessment Year 2013-14, closure of business, VAT registration surrender, issuance of revision notices, principles of natural justice, tax liability, quashing of impugned order, furnishing of invoices and purchaser details, sustainability of impugned order, Circular No.05 of 2021, reconciliation of Input Tax Credit, remitting the case back to the respondent, investigation of misuse of petitioner's name, liability based on fictitious invoices, cross-examination of dealers, and setting aside the impugned order.

Closure of Business and VAT Registration Surrender:
The petitioner closed down the business on 31.03.2011 and surrendered the VAT registration with the respondent. Despite this, the respondent issued revision notices in 2018 and 2020 regarding sales made during the Assessment Year 2013-2014 based on MIS reports from the Commercial Tax Department's web domain.

Principles of Natural Justice and Tax Liability:
The petitioner, aged 77 years, argued that the tax liability imposed without furnishing necessary details and invoices violated principles of natural justice. The petitioner also cited a previous court decision to support the claim that the impugned order was contrary to established legal precedent.

Contentions and Counterarguments:
The petitioner requested the respondent to provide detailed information about the alleged sales, including invoices and purchaser details. In response, the Additional Government Pleader stated that all necessary details were provided to the petitioner, justifying the demand confirmation.

Judicial Intervention and Circular No.05 of 2021:
The court found the impugned order unsustainable and referred to Circular No.05 of 2021, directing the respondent to follow prescribed procedures for reconciliation of Input Tax Credit. The court intervened by quashing the assessment order and remanding the case back to the respondent for a proper review.

Misuse of Petitioner's Name and Fictitious Invoices:
Concerns were raised about the misuse of the petitioner's name by third parties to issue fictitious invoices, potentially causing loss to the State Exchequer. The court emphasized the need for investigation and cross-examination of dealers to verify the authenticity of the invoices.

Remittal and Furnishing of Invoices:
The court set aside the impugned order, remitting the case back to the respondent for a fresh review in accordance with the law. The respondent was directed to furnish copies of invoices within a specified timeline and allow cross-examination of dealers if requested by the petitioner.

Conclusion:
The Writ Petition was allowed by way of remand, with no costs imposed. The judgment emphasized the importance of following legal procedures, ensuring the rights of the petitioner, and conducting a thorough investigation into the alleged tax liability.

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