TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1950
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....tioners / assessees have been grossly underreporting their sales turnover in the GST returns. Search operations were conducted. The computer systems used for billing and the documents containing sales data were seized from the premises vide mahazar dated 11.05.2023. Statements of the manager, accountant, software supplier, customers etc., were recorded under Section 70 of CGST Act. The proprietors were arrested. Show cause notices dated 29.06.2024 under Section 74 of the CGST Act were issued proposing tax demand for different financial years together with penalty and interest. 3. The writ petitioners submitted their replies. Enquiry was held. Since the respondents relied on the data retrieved by a private agency (FDI Labs), the writ peti....
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....ted on that ground? b) Whether the respondents were justified in resorting to best judgement assessment? 7. The learned standing counsel for the respondent submitted that in view of the dismissal of WP(MD)Nos. 1053 to 1056 of 2025 filed by the petitioners, the first point need not be taken up for determination. I cannot sustain this objection. It is true that the order rejecting the request for cross examination was made during the pendency of the assessment proceedings. It is akin to an intermediate order. I refrain from calling it an interlocutory order since it has a bearing on the rights of the assessee. If the assessee did not mount a challenge to the rejection order which was passed during the pendency of the proceedings, ....
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....to assessment proceedings. But when the report which forms the basis of the order itself is questioned, the proper officer is obliged to make available the author of the report for cross-examination. Failure to do so may render the assessment order vulnerable for having breached the principles of natural justice provided that the assessee is able to show prejudice on account of such denial. It is well settled that though the right to cross examine a given witness may not be provided by or under the statute, it being a part of the principles of natural justice should be held to be an indefeasible right. But the assessee must still make out a case for cross examination. It will not be "Ask, and it shall be given". The assessee seeking cross-e....
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....er by adopting best judgment assessment method under Section 74 of the CGST Act, 2017. During inspection, the officials did not obtain the sales data for the entire assessment period. What was retrieved from the electronic devices was only a data for a limited period. This was extrapolated by the proper officer to encompass the entire assessment period. The stand of the proper officer is that since sales and turnover data for the entire period had not been made available by the assessees, he had to resort to what is known as best judgment assessment. The question of law thrown up for consideration is whether he had the jurisdiction to do so when the statute did not expressly provide for the same. Sections 62 and 63 of the CGST Act, 2017 are....
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....nd issue an order. 12. The omission in Section 74(9) conferring power to make determination to the best of judgment of the authority appears to be conscious. What has been deliberately and consciously left over by the legislature cannot be supplied by the Courts. Assessment is a quasi-judicial function. The expression "assessment" comprehends the entire procedure for ascertaining and imposing liability upon tax payers. The process of assessment involves computation of income of the assessees, determination of tax payable by them, and the procedure for collecting and recovering tax (UOI v. Rajeev Bansal, (2024 SCC OnLine SC 2693). It is well settled that the provisions of a taxing statute have to be construed strictly. When the method of ....
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....ed Section 16 of the Madras General Sales Tax Act, 1959, held that there is no room for holding that there is an implied power to assess by best judgment when the Section does not expressly provide for the same. 13. The learned counsel for the petitioners drew my attention to the discussion that took place in the 6th GST Council Meeting held on 11th December, 2016. When it was suggested to include a clause to permit extrapolation of short levy where the taxpayer was not furnishing the details, the then Commissioner, GST Council explained that the settled legal position was that Tax Department could raise demand only to the extent that it had evidence and that extrapolation would not stand legal scrutiny. This also fortifies the conclusio....