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2023 (3) TMI 732 - HC - CST, VAT & Sales Tax
Validity of assessment orders - rate of G.P. added was 10 – 11% on the purchases made - Enforcement Wing was of the opinion that this modus operandi is incorrect and required re-consideration by adding gross profit of the respective years as per Profit and Loss (P&L) accounts and on the basis of the audited financials - opportunity of personal hearing to be provided, before such increase in the GP - principles of natural justice - HELD THAT:- The issue in this case relates to adoption of Gross Profit, whether at 10 – 11 % as put forth by the petitioner, or at the rate proposed by the Officers. There are any number of submissions that could have been put forth by the petitioner in support of the rate propounded by it, pursuade to the Assessing Officer, had only such opportunity been granted.
The petitioner, in its wisdom and based on trade practice, has adopted a certain rate of GP and it is in my view, not appropriate for the Assessing Officer to have adopted a substantially higher rate, without affording the petitioner an opportunity to explain the rates adopted by it - In fact, the conclusion in the impugned orders, is that no materials were provided by the petitioner in support of the G.P. adopted by it. Such failure is a direct consequence of the failure of the authority to have granted an opportunity to the petitioner.
That apart, it is a settled position that the reports of the officials of the Enforcement Wing cannot be adopted mutatis mutandis by the Assessing Officer who are expected to apply their minds, independently to the matter though having regard to the opinion of the Enforcement officials as well. In the present case, it is an admitted position that the authority has had nothing new to bring to the table but has merely adopted the rate as put forth by the Enforcement Officers.