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2019 (2) TMI 3 - MADRAS HIGH COURTValuation - dealer in Cement - inclusion of freight and coolie charges incurred by the assessee - sale of car and two wheeler was not reported for the assessment year 2007-08 - discount offered tax was not paid - TNVAT Act - Tribunal reversed the orders passed by the first appellate authority on going through the assessment file, which contained sample sale bills and some more sale bills produced at the time of arguments before the Tribunal. The Tribunal found that the sample bills do not contain freight and handling charges. Held that:- On a reading of the revised assessment orders wherein, the Assessing Officer says that the inspecting officials have verified and found that the assessee has not shown the freight and coolie charges and discount allowed in the sale bills issued by them. Further, the Assessing Officer states that the assessee has not produced sale bills issued by them for verification before him. The next sentence in the revision orders speaks of verification from the bill wise details furnished in respect of discount, freight and coolie charges and it is stated that no uniform method has been followed. This is probably a part of the report submitted by the inspecting officials. The revision of assessments itself are based upon a report of the Enforcement Wing. It has been held in several decisions that if incriminating material is unearthed during the course of inspection, it cannot form a basis of a revision of assessment. In other words, the Assessing Officer would be entitled to issue show cause notice to the assessee calling upon the assessee to explain as to why the turnover should not be revised; and why higher rate of tax should not be levied and demanded. Upon issuance of such notice and receipt of the reply from the dealer, it is incumbent upon the Assessing Officer to take an independent decision in the matter based on the materials placed before the Assessing Officer. There is no finding by the Tribunal that the stand taken by the assessee that it is an indirect expense and in commercial terms, it is a postsale expense was never disbelieved. Consequently, the appellate Tribunal could not have included the said amounts in the taxable turnover. More importantly, cement, being a controlled commodity, price fixation is done by the manufacturer or wholesale distributor, and the assessee, being a small retailer, has no role in fixation of the price, any other charges cannot form part of taxable turnover. Tax cases allowed - the substantial questions of law are answered in favour of the assessee.
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