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2015 (1) TMI 808 - ORISSA HIGH COURTOpportunity of being heard – Incriminating material intended to be used supplied to petitioner or not - Whether a dealer is entitled to be supplied with the materials intended to be used against him in the assessment proceeding for his rebuttal – Held that:- It is shocking to see as to how very casually an order of escaped assessment u/s 43 of the OVAT Act has been passed raising huge demand of ₹ 8,34,77,727/- utilizing various allegations against the dealer without confronting the same to the dealer - in C. Vasantlal and Co. v. Commissioner of Income-tax, Bombay City [1962 (2) TMI 7 - SUPREME Court] and observed that the ITO is not bound by any technical rules of the law of evidence - It is open to him to collect materials to facilitate assessment even by private enquiry - But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it - an assessing authority is entitled to collect the materials behind the back of the assessee - all the materials so collected by the assessing authority need be confronted to the assessee - only those materials which the assessing authority intends to utilize against the assessee during assessment are bound to be disclosed to the assessee - a dealer is entitled to be supplied with the materials intended to be used against him in the assessment proceeding for rebuttal and the dealer's explanation with regard to those materials is bound to be considered by the AO in the assessment order either accepting or rejecting the same. Stage at which the copy of the seized documents should be supplied to the petitioner – dealer - Should it be supplied before or after production of books of account for verification by the assessing officer – Held that:- In order to plug the leakage of revenue, the fiscal statutes provide various measures to be taken by the departmental officers including surprise visit to the place of business, audit visit, establishment of check-post, inspection of goods in transit, etc. - Pursuant to such provisions, very often departmental officers used to pay surprise visit to the business premises of the dealer to find out whether all the transactions effected by a dealer in his day-to-day business are recorded in his regular books of account maintained for the purpose of paying tax - The inspecting officers while conducting inspection at the place of business of the dealer, invariably try to trace out such duplicate accounts - If any such account comes to their possession, they cross-verify the same with regular books of account maintained by the dealer and submit their verification report to the assessing officer alleging suppression of purchase and/or sale, if any, found on such verification - no opportunity of hearing has been afforded to the petitioner before passing the impugned order of assessment - the incriminating materials utilized against the petitioner in the assessment order have not been supplied to the petitioner to which the petitioner is entitled to – thus, the order passed u/s 43 is set aside and the matter is remitted back to the AO for fresh assessment – Decided in favour of petitioner.
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