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2016 (11) TMI 1540 - HC - VAT and Sales TaxPrinciples of natural justice - escaped turnover - penalty - Held that - when independent proceedings are taken against an assessee by way of penalty as well as for escaped turnover, the contentions urged by the parties will have to be considered in its proper perspective. When the petitioner submits categorically that he will be able to explain the alleged escaped turnover by verification of the seized documents along with the books of accounts, necessarily an opportunity ought to have been granted in the matter. Failure to give such an opportunity definitely amounts to violation of the principles of natural justice and therefore, one more opportunity should be granted to the petitioner - petition allowed by way of remand.
Issues:
Challenge to assessment order under Section 25(1) of Kerala Value Added Tax Act, 2003 on grounds of violation of natural justice. Analysis: The petitioner challenges the assessment order, asserting it was passed in violation of natural justice principles as verification of seized records was not allowed. The petitioner argues that penalty and assessment proceedings are distinct, and reliance solely on penalty proceedings for assessment is improper. Citing relevant case law, the petitioner emphasizes the need for independent verification of seized documents to explain any alleged turnover suppression. The Government Pleader contends that the petitioner's accounts were verified, revealing turnover suppression, thus negating the necessity for further verification. However, the petitioner insists on the importance of examining seized records alongside account books to clarify any discrepancies. Upon review, it becomes evident that the assessing authority did not address the petitioner's request for verifying seized documents, instead relying on the finality of the penalty order. The court acknowledges the importance of separate consideration for penalty and turnover assessment proceedings, emphasizing the petitioner's right to explain alleged discrepancies through proper verification. Consequently, the court sets aside the assessment order, directing the assessing authority to reconsider the matter. The petitioner is granted an opportunity to verify seized records alongside account books, ensuring compliance with legal procedures. The judgment emphasizes upholding principles of natural justice by providing the petitioner with a fair chance to address the alleged turnover suppression effectively.
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