2011 (12) TMI 490 - HC - VAT and Sales Tax

Summary

Issues: Jurisdiction of assessing authority in issuing show-cause notice, validity of show-cause notice based on survey discrepancies

In this case, the petitioner, an assessee, challenged a show-cause notice issued by the Assistant Commissioner of Commercial Taxes, Anti Evasion, alleging tax evasion based on discrepancies in the purchases of zinc sulphate and zinc dross. The petitioner contended that the Anti Evasion Wing lacked jurisdiction to issue such notices, as only the regular assessing authority could do so. The petitioner also argued that there was no tax evasion and returns were filed before the regular authority, making the notices invalid. On the other hand, the Revenue justified the notice issuance citing discrepancies found during a survey at the petitioner's business place. The court held that it was premature to decide the notice's validity in a writ petition, emphasizing the assessee's duty to explain discrepancies in imports. The court ruled that anti-evasion authorities have the right to issue show-cause notices to prevent tax evasion based on survey findings. Consequently, the court dismissed the writ petition, stating it lacked merit and did not order costs.