2023 (3) TMI 493 - HC - CST, VAT & Sales Tax

Legality of the penalty orders and assessment orders - penalty imposed on the petitioner based on the data contained in the slips that were recovered from the premises of the petitioner - HELD THAT:- These are cases where the assessment for the years 2009-10 and 2010- 11 were mechanically completed based solely on the findings contained in the penalty orders passed by the Intelligence Officer for the years 2008-09, 2009-10 and 2010-11. The penalty orders were passed by placing reliance on the data contained in certain slips recovered from the business premises of the petitioner during a shop inspection that was carried out on 4.9.2010. It is not in dispute that those slips were recovered from one Balachandran, who was present in the premises of the petitioner on the date of inspection.

As rightly found by the First Appellate Authority, the fact that Sri. K.I. Sreenivasan and Sri.K.V. Abdul Rasheed were deposing against their own interests by admitting that the data in the slips pertained to their business, ought to have weighed with the Department to initiate an enquiry against the said persons to ascertain whether they had suppressed any turnover for the purposes of taxation. They could have done this simultaneously with a protective assessment against the petitioner assessee. The fact that they did not do so ought to have operated against them in an adjudication of the petitioner's case. On the contrary, the Intelligence Officer as also the Tribunal appears to have discarded this valuable evidence and mechanically presumed that the data contained in the slips recovered from the premises of the petitioner pertained to the business of the petitioner. Since there are no justification in the Intelligence Officer as also the Tribunal having discarded the evidence tendered by Sri. Balachandran, Sri. K.I. Sreenivasan and Sri. K.V. Abdul Rasheed, we cannot uphold the reasoning of the Tribunal, in the orders impugned before us, as correct or rational.

Further, as the assessment orders for the assessment years 2009-10 and 2010-11 were based on the penalty orders for the said years, and the said penalty orders in this judgment are set aside, the impugned order of the Tribunal, to the extent it restores the assessment orders for the said years, is also set aside.

Revision allowed.