The Commissioner, Commercial Tax U.P. Lucknow vs. S/S Jml Marketing PVT. LTD.
Held
The Court held that initiating assessment proceedings solely on a Tax Audit report without recording "reasons to believe" is bad in law. The Court also found no error in the acceptance of evidence by the appellate authorities and upheld the Tribunal's finding that the exercise was revenue neutral.
Facts
The Assessing Authority initiated proceedings under Section 29(1) of the VAT Act based on a Tax Audit report alleging procurement of tax invoices for illegal Input Tax Credit. The assessment order was recalled, and a demand was raised. The dealer appealed, providing evidence of transportation, which was accepted by the Appellate Authority. The Tribunal dismissed the revenue's appeal.
Key Issues
Whether assessment proceedings initiated solely on a Tax Audit report without "reasons to believe" are valid, and whether evidence produced at the appellate stage is admissible.
Sections Cited
Section 29(1)
AI-generated summary — verify with the full judgment below
Court No. - 38 Case :- SALES/TRADE TAX REVISION No. - 118 of 2020 Revisionist :- The Commissioner, Commercial Tax U.P.
Lucknow Opposite Party :- S/S Jml Marketing Pvt. Ltd.
Counsel for Revisionist :- Bipin Kumar Pandey Hon'ble Pankaj Bhatia,J.
Heard Sri B.K. Pandey, learned counsel for the Department and Sri Subham Agarwal, learned counsel for the respondents.
The present revision has been filed challenging the judgment and order dated 7.7.2020 passed by the Tax Tribunal in respect of the respondents for the assessment year 2014-15 under the U.P. Value Added Tax Act.
It was alleged that respondent was carrying the business of purchase and sale of edible oil. Initially assessment of the dealer was accepted under the deemed scheme vide order dated 9.7.2016, however, on the basis of a report received from the office of the Joint Commissioner Tax Audit dated 9.4.2017 to the effect that no actual sale has taken place and only the tax invoices have been procured to claim benefits of Input Tax Credit on illegal transaction, the Assessing Authority proceeded under Section 29(1) of the VAT Act and recalled the order dated 9.7.2016 and on the basis of the fresh assessment, created a demand
The judgment continues below.
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