2009 (4) TMI 878 - AT - VAT and Sales Tax

Summary

Issues:
Challenge to show-cause notice for revocation of settlement certificate under the West Bengal Sales Tax Act, 1994; Jurisdiction of designated authority; Validity of notice based on alleged suppression of information; Payment of tax under compulsion; Interpretation of section 12 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999.

Analysis:

The applicant challenged a show-cause notice proposing to revoke a settlement certificate issued under the West Bengal Sales Tax Act, 1994. The notice alleged suppression of information and incorrect details. The applicant contended that the Senior Joint Commissioner lacked jurisdiction to issue the notice, as no notification appointed him as the designated authority. The applicant argued against the claim that he voluntarily paid Rs. 20 lakhs as tax on suppressed sales, stating it was under compulsion and not an admission of liability.

The State Representative asserted that the Senior Joint Commissioner had the jurisdiction to issue the notice and claimed that the applicant willfully suppressed sales information. The Tribunal examined the jurisdictional issue and the nature of the tax payment. It noted an amendment allowing the Senior Joint Commissioner to issue such notices. The Tribunal found no evidence that the applicant voluntarily paid the tax without a formal assessment or demand notice, questioning the basis of the alleged suppression.

Section 12 of the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 allows revocation of settlement certificates for suppression of material information or furnishing incorrect details. The Tribunal observed that the notice lacked substantial evidence of suppression or false information by the applicant. The mere filing of a cross-revision did not disqualify the applicant from seeking settlement under the Act. Consequently, the Tribunal set aside the notice, ruling in favor of the applicant.

In conclusion, the Tribunal allowed the petition challenging the show-cause notice for revocation of the settlement certificate. It found no valid reason for the notice, as the allegations of suppression or incorrect information were not substantiated. The Tribunal emphasized the importance of evidence and compliance with legal provisions in such matters, ultimately ruling in favor of the applicant.