TMI Blog2013 (3) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... ransport agent before the Anti Evasion Bureau, which were the part of the report of Anti Tax Evasion Bureau. From the perusal of the orders passed by the authority it is clear that the authority has fixed the amount of sale, which was escaped from income, on the basis of the report submitted by the Anti Evasion Bureau. However, the authority was performing the quasi judicial function. Hence, it was obligatory on the part of the authority to arrive on its own findings and the authority was obliged to adopt the procedure, which is known to the law. Thus the procedure adopted by the authority is against the law and perverse. The authority relied on the Income Tax returns and the findings of the enquiry report of New Dixit Transport Commission Agent without assessing the contents independently. The arguments advanced by the petitioner that the assessment is beyond the power of authority and beyond the period of limitation could not be accepted because in the present case, the assessment is for block period, which is in accordance with Section 55-A of the VAT Act and it was introduced vide amendment of Act No.26/2007 that for the purpose of this section the expression "block peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries and M/s Asha Oil Industries have made transactions through M/s Hajarilal Sandeep Kumar. The Anti Evasion Bureau also took a note of the fact that Income Tax Department also assessed the tax of M/s C.P.Industries on the basis of transactions in the accounts of Gwalior Nagrik Sakh Samiti Maryadit and assessed the liability of income tax of M/s C.P.Industries. Anti Evasion Bureau came to the conclusion that these firms have evaded payment of tax of near about rupees twelve crores. 4. After receiving the letter dt.4.10.2010, a show cause notice under Sections 18 (4), 20 (5), 20 (6), 21 (1) 52 (2) of the M.P.VAT Act, 2002 was issued to M/s C.P.Industries for block assessment for the period of 1.4.2006 to 6.8.2008. The petitioner firm M/s C.P.Industries has been shown as Associate Firm. It is mentioned in the show cause notice that the petitioner submitted incomplete tax statements for the period 1.4.2006 to 6.8.2008, hence, the petitioner is liable for block assessment in accordance with Section 52 (2) of the VAT Act on the basis of past assessment method under Section 20 (5). The allegation against the petitioner firm was that the petitioner firm was associated in tax eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion is erroneous because the entries are not in regard to sale and the entries are of personal transactions of different identities. It is further submitted that in come tax department seized the account books in the year 2008 and those have not been returned. Photo copies provided to the petitioner are not readable, hence, the firm is not in position to file proper reply. Similarly for the year 2008-09, on the basis of the entries in Punjab and Sindh Bank, total sale of ₹ 5,12,15,354/- has been shown, however, the details of the entries have not been supplied. The petitioner further filed the reply and stated that liability of tax has been determined on the basis of order passed by the Income Tax Department. Against the aforesaid order, an appeal is pending. The petitioner further pleaded that the petitioner wants to cross examine the transport agents and transporters. No transporter has mentioned the name of the petitioner, Hence those transporters be called for cross examination. 7. The revisional authority, Dy.Comissioner vide its order dt.24.12.2011 (Annexures P/1) passed under Section 55-A of VAT Act has held that the petitioner has made total sale of ₹ 1,71 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 121. 10. The findings of the authorities are based on the following facts : (i) The authorities relied on the enquiry report of Anti Evasion Bureau and the record seized from New Dixit Transport Commission Agent. It has been held that for the year 2006-07 on the basis of the enquiry report of M/s Dixit Transport Commission Agent, the sale is ₹ 12,90,00,000/Similarly, for the year 2007-08, the sale is ₹ 2,05,00,000/and for the year 1.4.2008 to 6.8.2008, the sale is of ₹ 25,00,000/-. Similarly the authority has also considered the information in deciding the sale on the basis of the tax fixed by the Income Tax Department, the department quantified total income as ₹ 66,94,14,821/-. (ii) In arriving out of the aforesaid findings, the authority has relied on bank statement of UCO Bank, State Bank of India, HDFC Bank, State Bank of India, Jayendraganj. Hence, the authority has fixed the sale of ₹ 64,79,55,275/for the year 2006-07 on the basis of the findings of Income Tax Department. Similarly, for the year 2007-08, the authority has fixed the sale of ₹ 9,60,39,265/- on the basis of the findings of the Income Tax Department and for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court has held as under after relying on the earlier decision of the Hon'ble Supreme Court in Girdhari Lal Nannelal v. CST reported in (1976) 3 SCC 701, : 15. The High Court furthermore committed a serious error insofar as it failed to draw a distinction between the assessment under income tax and assessment under sales tax. Whereas income tax is levied on income under the Income Tax Act irrespective of the sources from which such an income had been derived, sales tax is levied only on the quantum of sales and, therefore, element of transaction of sale is a prerequisite for levy of sales tax. This aspect of the matter has been considered by this Court in Girdhari Lal Nannelal v. CST wherein it was held : (SCC p.704, para 7) 7. The approach which may be permissible for imposing liability for payment of income tax in respect of the unexplained acquisition of money may not hold good in sales tax cases. For the purpose of income tax it may in appropriate cases be permissible to treat unexplained acquisition of money by the assessee to be assessee's income from undisclosed sources and assess him as such. As against that, for the purpose of levy of sales tax it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete because certain sales appearing in the books of Hazi Usmankutty and other wholesale dealers were not shown in the books of account of the assessee. The Sales Tax Officer relied on the evidence furnished by the entries in the books of account of Hazi Usman Kutty and other wholesale dealers for the purpose of coming to the conclusion that the return filed by the assessee was incorrect or incomplete. Placed in these circumstances, the assessee could prove the correctness and completeness of his return only by showing that the entries in the books of account of Hazi Usmankutty and other wholesale dealers were false, bogus or manipulated and that the return submitted by the assessee should not be disbelieved on the basis of such entries, and this obviously, the assessee could not do, unless he was given an opportunity of crossexamining Hari Usmankutty and other wholesale dealers with reference to their accounts. Since the evidentiary material procured from or produced by Hazi Usmankutty and other wholesale dealers was sought to be relied upon for showing that the return submitted by the assessee was incorrect and incomplete, the assessee was entitled to an opportunity to have Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial function. Hence, it was obligatory on the part of the authority to arrive on its own findings and the authority was obliged to adopt the procedure, which is known to the law. 19. From the perusal of the findings of the orders, as discussed above, in our opinion, the procedure adopted by the authority is against the law and perverse. The authority relied on the Income Tax returns and the findings of the enquiry report of New Dixit Transport Commission Agent without assessing the contents independently. Hence, there is no independent assessment by the authority in regard to total amount of sale. Hence, it is perverse and against the law. 20. Hon'ble Supreme Court in the case of Agarwal Oil Refinery Corporation Vs. Commissioner of Trade Tax reported in (2011) 13 SCC 275 has held in regard to power of the court in interfering with the findings of facts. In the aforesaid facts, Hon'ble Supreme Court specifically held that if the findings recorded by the authorities are perverse or based on apparently erroneous principle, which are contrary to law, or the authority has arrived on the findings by a flagrant abuse of judicial power or gross violation of justice, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus preeminently one of the discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court. 9. In Harbansal Sahnia v. Indian Oil Corpn. Ltd., enumerating the contingencies in which the High Court could exercise its writ jurisdiction in spite of availability of the alternative remedy, this Court observed thus: 7 that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period shall be assessed irrespective of the year or years to which such tax relates and irrespective of the fact whether regular assessment for any one or more of the relevant years is pending or not; (e) the assessment under this section shall be in addition to the regular assessment in respect of each year included in the block period; (f) the total evasion of tax relating to the block period shall not include the tax assessed in any regular assessment or the tax paid alongwith the returns filed by the dealer as tax of such block period; (g) the tax assessed under this section shall not be included in any regular assessment of any year included in the block period; (h) where the dealer proves to the satisfaction of the Commissioner that any part of the tax referred to under this section relates to a year for which the year has not ended or the date of filing returns has not expired and the transactions relating to such tax are recorded on or before the date of requisition or inspection, in the books of account or other documents maintained in the normal course relating to such year, the said tax shall not be included in the block period; (i) the provisions of Sec ..... 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