2025 (5) TMI 853 - HC - VAT / Sales Tax

Challenge to assessment order - non-consideration of explanation provided by the applicant/revisionist - principles of natural justice - HELD THAT - On a pointed query put to the counsel for the revisionist as to where any ground has been taken in the grounds so taken in the grounds of appeals filed before the authorities below he could not show any such ground rather he that material evidence and documents have not been considered. Even before this Court no such pleadings have been raised in the present revision that in spite of specific pleadings being made pressed or argued the same has not been considered rather he tried to refer his written argument so submitted before the tribunal. The argument raised by the counsel for the revisionist can be accepted but on the contrary the record shows that the first appellate authority party allowed the appeal which will go against the interest of the revisionist. Once the argument of counsel for the revisionist is accepted that the orders have been passed without considering the material available on record since the Revenue has not preferred any appeal against the order impugned this Court refrain itself for going into it on the basis of argument raised by the counsel for the revisionist. Conclusion - The general contention of non-consideration of evidence is insufficient to overturn the impugned orders especially when the appellate authorities had partly allowed the revisionist s appeals. The impugned orders do not call for any interference by this Court - Petition dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in this matter were:

- Whether the Commercial Tax Tribunal committed an error of law by not considering and ignoring the explanation provided by the revisionist, which had material bearing on the case.

- Whether the Commercial Tax Tribunal committed an error of law by ignoring and not considering the evidence on record.

These questions essentially focused on the procedural and substantive correctness of the orders passed by the assessing authority, first appellate authority, and the Commercial Tax Tribunal in relation to the best judgment assessment under the relevant tax statutes.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Whether the Commercial Tax Tribunal erred by ignoring the explanation provided by the revisionist.

Relevant legal framework and precedents: The assessment and appeal proceedings were governed by the provisions of the U.P. VAT Act and the Central Sales Tax Act, 1956. Under Section 45(10) of the U.P. VAT Act, the assessing authority may initiate assessment proceedings based on survey materials. The revisionist was entitled to submit explanations and evidence in response to show cause notices and during appeals.

Court's interpretation and reasoning: The Court noted that while the revisionist contended that explanations and material evidence were submitted at every stage, no specific grounds were raised before the appellate authorities or the tribunal that such explanations were ignored. On scrutiny, the Court found that the revisionist failed to point to any particular pleadings or arguments made in the appeals that explicitly stated that the explanations were disregarded.

Key evidence and findings: The revisionist's business premises were surveyed, and certain materials were seized. A show cause notice was issued, to which the revisionist replied with evidence. Despite this, a best judgment assessment was made rejecting the books of accounts. The revisionist filed appeals which were partly allowed, including a reduction in enhancement by the tribunal.

Application of law to facts: The Court observed that the first appellate authority had partly allowed the revisionist's appeal, which indicated that some consideration was given to the revisionist's submissions. The absence of any specific pleadings alleging non-consideration of explanations weakened the revisionist's claim.

Treatment of competing arguments: The revisionist argued broadly that explanations were ignored, but failed to demonstrate that such arguments were formally raised and pressed before the tribunal. The State-respondent contended that all materials were duly considered and no specific point of non-consideration was raised below or in revision.

Conclusion: The Court held that the mere general assertion that explanations were ignored was insufficient to establish error of law. Since no specific grounds were taken, the Court refrained from interfering on this basis.

Issue 2: Whether the Commercial Tax Tribunal erred by ignoring and not considering the evidence on record.

Relevant legal framework and precedents: Under the relevant tax laws, the assessing authority and appellate bodies are required to consider all relevant evidence and material placed before them. The best judgment assessment is a discretionary power but must be exercised after due consideration of evidence.

Court's interpretation and reasoning: The Court examined the record and noted that the revisionist had submitted voluminous evidence and written arguments at various stages. However, the revisionist did not point out any specific evidence that was ignored or any particular instance of non-consideration in the grounds of appeal or revision petition.

Key evidence and findings: The revisionist's appeal was partly allowed by the first appellate authority and further partly allowed by the tribunal, which reduced the enhancement from four times to two percent. This indicated that the evidence was considered to some extent.

Application of law to facts: Since the revisionist did not raise any specific pleadings or grounds alleging that particular evidence was disregarded, the Court found no basis to conclude that the tribunal committed error of law by ignoring evidence.

Treatment of competing arguments: The revisionist's counsel argued generally that evidence was ignored, while the State's counsel denied any such omission and pointed out the absence of specific pleadings or grounds. The Court gave weight to the procedural record, which showed no such specific challenge.

Conclusion: The Court concluded that the general contention of non-consideration of evidence was insufficient to overturn the impugned orders, especially when the appellate authorities had partly allowed the revisionist's appeals.

Additional Observations:

The Court noted that since the Revenue had not preferred any appeal against the impugned orders, the Court was reluctant to interfere solely on the basis of the revisionist's general arguments. The Court emphasized the importance of raising specific grounds and pleadings at the appropriate stages to enable effective adjudication.

3. SIGNIFICANT HOLDINGS

- "On a pointed query put to the counsel for the revisionist as to where any ground has been taken in the grounds so taken in the grounds of appeals filed before the authorities below, he could not show any such ground, rather he that material evidence and documents have not been considered."

- "Once the argument of counsel for the revisionist is accepted that the orders have been passed without considering the material available on record, since the Revenue has not preferred any appeal against the order impugned, this Court refrain itself for going into it, on the basis of argument raised by the counsel for the revisionist."

- The Court established the principle that general assertions of non-consideration of evidence or explanations without specific pleadings or grounds in appeals or revisions are insufficient to vitiate the impugned orders.

- The final determination was that the impugned orders passed by the Commercial Tax Tribunal and the appellate authorities did not call for interference, and the revision petitions were dismissed.