M/S. Dinesh Gold vs. The Commercial Tax Officer

Held

The Court allowed the writ petitions, setting aside both the assessment order dated March 29, 2018, and the penalty order dated May 29, 2018, passed by the Commercial Tax Officer (Audit), Charminar Division, Hyderabad. The petitioner was granted two months from the date of receiving a copy of the order to produce the relevant tax invoices. The Commercial Tax Officer was directed to consider these documents and pass a fresh assessment order if they were produced. The Court's reasoning was based on the petitioner's submission that its inability to produce documents was due to their seizure by the police, and the revenue's agreement to allow the petitioner an opportunity to present its case. The ratio decidendi is that a taxpayer should be given a reasonable opportunity to present evidence, especially when the non-production is due to circumstances beyond their control, and the revenue authorities agree to such an opportunity.

Facts

M/s. Dinesh Gold, Hyderabad, the petitioner, filed two writ petitions. In the first, it challenged an order dated May 29, 2018, by the Commercial Tax Officer (Audit), Charminar Division, Hyderabad, which levied a penalty equivalent to the disputed tax under Section 53(3) of the Telangana Value Added Tax Act, 2005. In the second petition, the petitioner challenged the same Commercial Tax Officer's action of denying input tax credit due to the non-production of tax invoices, and the consequential assessment order dated March 29, 2018. The petitioner's counsel stated that the firm could not produce the invoices because its documents were seized by the Central Crime Station Police in relation to Crime No. 224 of 2016. The petitioner requested time to produce the documents.

Key Issues

1. Whether the petitioner, M/s. Dinesh Gold, should be granted an opportunity to produce tax invoices to substantiate its claim for input tax credit, given that its documents were seized by the police. This issue turns on the principles of natural justice and the procedural fairness in tax assessments, particularly concerning the ability of a taxpayer to present evidence. The petitioner argued that it was unable to produce the necessary tax invoices for input tax credit because all its documents were seized by the Central Crime Station Police during a criminal investigation. It contended that if granted sufficient time, it could produce these documents to support its claim. The revenue, represented by the learned Special Standing Counsel, indicated agreement with this course of action.