TaxTMI 
TaxTMI 
2019 (11) TMI 1156
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....common Judgment Revision Case No. 129 of 2016 has been allowed; (b) For quashing the Appellate Order dated 03.06.2013 (Annexure-8) by which the petitioner's appeal against the penalty order has been dismissed and the order of penalty under Section 70(5)(b) of Jharkhand Value Added Tax Act, 2005 has been confirmed; (c) For quashing the Order dated 26.05.2010 (Annexure-6) by which the assessing authority has imposed penalty of Rs. 58,78,944/- under Section 70(5)(b) of Jharkhand Value Added Tax Act 2005 on the Petitioner; (d) And also for quashing the demand notice dated 26.05.2010 (Annexure-7) raised pursuant to the aforesaid orders. 2. The facts of the case lie in a short compass. A team of officers of the Commercial Taxes Department made an inspection of the petitioner's factory on 13.05.2010 and prepared an inspection report in which, besides other allegations at page-4 of the inspection report, it was stated that the entries in the books of account of the goods purchased in the year 2010-11 namely the raw materials, iron ores, coal and dolomite have not been made and consequently the goods were seized under the provisions of Section 70(5)(a) of the J....
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....cerned, the learned Tribunal after considering various judgments of the Jharkhand High Court as well as of the Hon'ble Supreme Court of India hold that findings of the appellate authorities cannot be sustained and ultimately the order of penalty under Section 40 (2) was set aside. However, the learned Tribunal sustained the order of penalty passed under Section 70 (5) (b) of the JVAT Act 2005, which has been challenged by the petitioner in the instant writ application. 3. The learned senior counsel for the petitioner submits that from perusal of the first part and last part of the show-cause notice dated 13.05.10, the following things are evident: (a) No reasons at all has been assigned for issuance of notice under Section 70(5)(b); (b) No satisfaction of the authorities has been recorded for imposition of penalty under Section 70 (5) (b); (c) No gist of accusations has been given in the said notice as required under Rule 58 of the JVAT Rules, 2006. 4. In this context, learned senior counsel referred to Rule 58 (1) of the JVAT Rules, 2006, which is quoted herein below: "58. Opportunity of Hearing- (1) The authority referred to in Rule 57 sh....
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....otice issued prior to the finalisation of the classification cannot be taken note as show-cause notices for the recovery of demand, and we are in agreement with the said findings of the two members of the Tribunal. This is because of the fact that issuance of a show-cause notice in a particular format is a mandatory requirement of law. The law requires the said notice to be issued under a specific provision of law and not as a correspondence or part of an order. The said notice must also indicate the amount demanded and call upon the assessee to show cause if he has any objection to such demand. The said notice also will have to be served on the assessee within the said period which is either 6 months or 5 year as the facts demand. Therefore, it will be futile to contend that each and every communication or order could be construed as a show-cause notice. For this reason, the above argument of the Revenue must fail." 6. Placing reliance on the above judgment, the learned senior counsel further submits that show-cause notice as required under law has not been issued by the revenue. Other documents cannot be construed as show cause notice by the authority. Any other documents in t....
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....eturn has been annexed in the writ application. This return was filed on 25.05.2010 which included all the documents, the details of all the purchases of raw materials (both within the State and outside State), the relevant accounts and the details of all sales (both within the State and outside State). However, the assessing officer and later on the appellate authority as well as the Tribunal totally ignored the returns filed by the petitioner. The learned senior counsel further referred Section 70(5)(b) of the JVAT Act, which is quoted herein below: "70 (5) (b) The Prescribed Authority shall, in a case where the dealer or the person in-charge of goods as mentioned in Clause (a) fails to produce any evidence or fails to satisfy the said authority regarding the proper accounting of goods, impose a penalty, after allowing an opportunity of hearing in the prescribed manner to the dealer or such person, which shall be equal to three times the amount of tax calculated on the value of such goods and the goods shall be released as soon as the penalty is paid." 11. He further submits that the penalty could be charged only if assessee fails to produce any evidence. In the insta....
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....etitioner in respect of the assessment order passed by the same authority, wherein it was stated that nothing wrong was found for the said assessment year, learned counsel submits that the assessment order has got nothing to do with the proceedings under Section 70(5)(b). 14. Having heard learned counsels for the parties and perusing the materials available on record, it appears that the learned Tribunal has dismissed the revision application holding as under: "(i) In the result the order dated 24.12.2010 of learned DCCT and the appellate order dated 3.6.2013 of learned JCCT (Appeal) as u/s 40 (2) JVAT are hereby set aside. The matter is remanded to the learned DCCT or his successor to pass a fresh order after hearing the parties and after making required enquiry. In so far as the order dated 26.5.2010 of learned DCCT and appellate order dated 3.6.2013 of learned JCCT (Appeal) as passed u/s 70(5)(b) are concerned, they are affirmed. (ii) Accordingly the revision petition bearing no. JR 128 of 2013 is dismissed while revision petition no. JR 129 of 2013 is allowed subject to above direction ". 15. Learned Tribunal then proceeded to discuss the case in relatio....
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.... wise accounts. 17. The Tribunal dealt with the fact that on 24.05.2010, the monthly abstract purchases 'April-2010' has been mentioned and also recorded the petitioner's contention that legislature has not used any explanation like daily entry of transaction. 18. The Tribunal has committed a blunder in as much as instead of the word "retailer" used the word "dealer". This is a mistake of fact committed by the Tribunal and its findings on the incorrect provision of law which is not applicable in the case of the petitioner. 19. The Tribunal has further erred in holding that no documents in relation to purchases has been filed and has further stated that even before the Tribunal not a single bill of purchase of goods as seized by the inspecting team has been produced to show the bona-fide transactions. However, from the materials available on record it transpires that all these documents were part of the revision petition as Annexure-4 of the paper book before the Tribunal and these documents are also annexed with the Writ petition. Moreover, all these documents were also annexed in the return which was filed before the Tribunal by way of supplementary affidavit. 20. The ....
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.... tried to justify the impugned orders on the grounds that it was not necessary to give details, gist of accusations in the notice to show cause and by not giving such notice, it would not render the proceedings to be void. Further, a detailed reasoning has been given in the inspection report and consequently the short comings in the show cause notice have been explained in the inspection report itself. Counsel for the State in respect of the Assessment Order passed by the same authority, wherein it was stated that nothing wrong was found for the said assessment year, has submitted that the Assessment Order has got nothing to do with the proceedings under Section 70(5)(b). 28. The contention of the State is not worth consideration as the law regarding issuance of show cause notice is very clear. Not only in the case of Metals Forgings (supra) but in various cases decided by the Hon'ble Supreme Court it has been held that notice has to be given in the required format. Rule 58 of the JVAT Rules is very clear that authority shall cause to be served upon the person proceeded against a notice which shall contain a gist of the accusations. The Hon'ble Apex Court has held in unequivocal....
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....s the Petitioner shown all those details. It is evident that the Tribunal has missed out all these details and has consequently given an erroneous finding. The returns for April 2010 were annexed with the Supplementary Affidavit before the Commercial Taxes Tribunal which is at Annexure-10 in the Writ petition. From perusal of the returns, it is evident that all the details of sales and purchases both within the State as well as Inter State transactions have been provided. The authorities below as well as the Tribunal failed to consider the return which was filed by the Petitioner to find out if at all there was any evasion of tax. 31. Further, in the scheme of value added tax a dealer can avail input tax credit on the tax paid by him at the time of purchase of raw materials. In this case, coal has been purchased from Central Coalfields Ltd and the invoices have been annexed for which there is no reason to disbelieve the authenticity of the same nor the Respondents have any occasion to make such contention nor they have ever raised this. 32. The Counsel for the State also argued that in terms of the Act and Rules it is mandatory for the petitioner to maintain a daily accounts ....