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2019 (3) TMI 407 - HC - VAT and Sales TaxEvasion of tax - mala-fide intention or not - under-invoicing in respect of sales made to different customers - enquiry as provided under Rule 18-C of the Rules - Validity of assessment made u/s 12-A of the Tamil Nadu General Sales Tax Act, 1959 - Held that:- The impugned assessment is not an assessment under Section 16 of the TNGST Act. On a reading of the assessment order as well as the order passed by the first appellate authority and the Tribunal, it is evidently clear that the Assessing Officer invoked the power under Section 12-A of the TNGST Act. A reading of the section 12A shows that there are principally two elements which are required, which the Assessing Officer has to be satisfied while invoking the power under Section 12-A of the TNGST Act; first of which being that there is an intention on the part of the petitioner/dealer to evade payment of tax and for such intention, if he had shown that the sale prices are at abnormally lower rates compared to the prevailing market price of such goods, the power can be invoked; and secondly, the power can be invoked within the time stipulated under Section 12-A of the TNGST Act - Admittedly, in the instant case, the Assessing Officer did no enquiry to ascertain the prevailing market price of Oxygen at the relevant time. The assessment has been completed solely based upon the price of gas sold by the petitioner as recorded in their books of accounts. Therefore, we are of the view that unless there was a comparison with the prevailing market price and then the Assessing Officer is satisfied that the price shown in the books of accounts of the dealer was abnormally low compared to the prevailing market price and this was with a view to evade payment of tax, then alone, Section 12-A could have been invoked. There is a marked distinction between the power exercisable under Section 16 and Section 12-A of the TNGST Act. In the case on hand, the Assessing Officer has gone only by the difference in price of the gas sold by the petitioner/dealer and there is nothing on record to indicate that the petitioner/dealer had collected more than what was shown in their books of accounts - Therefore, unless the twin tests stipulated in Section 12-A were satisfied, the question of invoking the same would not arise. The Tribunal erred in holding that it would be unnecessary to make an enquiry with the other dealers. In the case on hand, the dealer has specifically pointed out that there were other similar manufacturers, who were also selling for the same price. If the Assessing Officer chose to disbelieve the statement, it goes without saying that he has to enquire the other dealers. Without doing so, he cannot discredit or reject the explanation or statement made by the petitioner/dealer. However, as already pointed out, the Assessing Officer did not undertake any such exercise. In fact, the order is cryptic and devoid of reasons. Tax case revision allowed - substantial questions of law are answered in favor of the petitioner/dealer.
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