2019 (12) TMI 1009

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....2014. The NHDCL, stated to have been set up in February 1983 as a Public Sector Undertaking by the Government of India, is an autonomous body constituted under the Companies Act, 1956 in recognition of the imperative for a National Level Agency to assist the speedy development of the handloom sector. Its activities include the coordination of activities in regard to the procurement and supply of inputs at reasonable prices, augmenting the marketing efforts of the State and assisting in the upgradation of technology in the handloom sector, among others. 2. According to the petitioner, it operates on a no profit no loss basis and merely facilitates the transactions of purchase and sale of yarn between its constituent units ('units'....

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....oncluded, on the basis of the enqiries that such purchase and sale transactions involving exempted goods (local silk hank yarn) were clandestine and engaged in with the intention of avoiding payment of tax thereupon. 6. A pre-assessment proposal was sent along the aforesaid lines to the petitioner, who objected to the same. The petitioner reiterated that the yarn bought from Salsar was only indigenous silk yarn in hank. A Confirmatory affidavit of the proprietor of Salsar, one Ashok Kumar, was filed. It was also specifically submitted that the petitioner had no margin of profit on the sales effected to the societies. The petitioner requested that in the event of the Assessing Officer intending to conclude the matter adverse to its intere....

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....unity was only academic and that the assessee could well have obtained an affidavit from the cooperative societies as it had done from Salsar Corporation. 9. Having heard learned counsel and upon careful perusal of the pleadings, evidences and records of assessment produced before me, it appears very apparent that the principles of natural justice have been given a go-by in the present case. The extracts from the website relied upon by the Department no doubt reveal that Salsar was a trader and importer of yarn. However, this, by itself cannot lead to the inference of clandestine sales by the petitioner to the societies. An enquiry would have to be carried out in an appropriate manner after providing the material relied upon by the De....