9911796707
TMI Blog2008 (9) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner (Assessment), Special Circle-III, Ernakulam. The petitioner used to import superior kerosene oil from abroad under the import licence granted by the Government of India. The import is done through Madras and Kochi ports. During the assessment year 1996-97, the petitioner imported 5,616.454 kls of kerosene through Kochi port and out of which 1,595.001 kls were sold locally and 4,728 kls were transported to Pondicherry by way of branch transfer as claimed by him. The Intelligence Officer of the Intelligence Wing of the Department had inspected the business premises of the petitioner on July 5, 1996 and October 8, 1996 and had noticed certain discrepancies in the books of account maintained by the dealer and pointing out those omissions and commissions had prepared shop inspection reports, SIR No. 190472/July 5, 1996 and SIR No. 33051/October 8, 1996 and the same had been served on the assessee. The petitioner had filed its annual returns both under the KGST Act and the CST Act for the assessment year 1996-97. In the returns filed for the purpose of KGST assessments, the assessee had declared the total and taxable turnover of Rs. 4,74,85,047 and Rs. 129,16,407, resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely incorporates the reasoning of the intelligence officer for levying penalty under section 45A of the KGST Act and then proceeds to observe: "The abovesaid proposals were duly communicated to the assessee as per this officer's pre-assessment notice dated October 20, 2000 inviting objections, if any. The assessee has received the notice on November 9, 2000, but had not utilised the opportunity afforded till date. The assessee has neither responded nor filed objections. Therefore, it is presumed that the assessee has no objection against the proposal. In the circumstances the proposals are confirmed and the assessment order under the CST Act for 1996-97 stands completed as already proposed." By the aforesaid best judgment assessment orders, the assessing authority had made huge additions to the conceded taxable turnover and also has denied the claim of branch transfers made by the assessee and has treated the entire turnover as inter-State sales. In the first appeals filed, the first appellate authority has not made any improvement in the order passed by the assessing authority. A perusal of the orders passed would only indicate that he has merely confirmed the improper orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... batore. The above findings of the assessing authority is not rebutted by the appellant. The appellant has not produced the transporting copy of the delivery note which is under the custody of the appellant and the stock transfer to Pondicherry could be established by the transporting copy of the departmental delivery note. The records seized at the time of inspection evidenced that the appellant has effected unaccounted transactions under the guise of stock transfer. Considering the quantum of suppression detected by the Intelligence Wing which comes to Rs. 3,45,68,640 we are of the view that the addition made by the assessing authority and sustained by the first appellate authority and levy of tax on the above amount under the CST Act is fair and reasonable and therefore we confirm the decision of the authorities below in this case. Since the difference in the total turnover as per monthly return and total turnover conceded as per accounts amounts to Rs. 1,74,000 has not been properly explained by the appellant, the levy of tax on Rs. 1,74,000 under the KGST Act is also confirmed." The assessee, being aggrieved by the orders passed by the Sales Tax Appellate Tribunal has presente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedure laid down for imposing the liability on the tax-payer. The term "assessment " used in the Act comprises the provisions relating to the subject-matter of taxation, rate of tax, basis at which the quantum of tax is to be arrived at, the exemptions to be given and the authorities for enforcing tax liability. The procedure for assessment should comply with the rules of natural justice and if not it would be unreasonable restriction violating both articles 14 and 19 of the Constitution of India. Even in the case of best judgment assessment, the assessee should be offered an opportunity to explain every material gathered and intended to be used against him by the authority. Taxing statutes generally authorise imposition of penalty for delay in filing returns, concealment of tax liability, default in payment of tax, contravention of mandatory provisions, etc. The proceedings for imposition of penalty are quasi-criminal in nature. This power of imposing penalty is only discretionary and the penalty shall not be ordinarily imposed unless the person/dealer has acted deliberately in defiance of law or guilty of conduct contumacious or dishonest or acted in conscious disregard of his o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment assessment. The order of assessment should definitely indicate the application of mind by the assessing authority even while completing the best judgment assessment and he is not expected to emboss his "seal of approval" to the orders made by the intelligence officer of the Department, since both these proceedings are distinct and different. In our considered view, the assessing authority has not independently applied his mind, but has merely adopted whatever that was done by the intelligence officer of the Department for the purpose of imposing penalty under section 45A of the Act. As we have already observed that the assessing officer is a quasi-judicial authority and while exercising his quasi-judicial function, he has to apply his mind independently and while doing so, can also take into consideration the findings of the intelligence officer of the Department and at any rate, that cannot be the sole basis. In this view of the matter, we cannot sustain the order passed by the assessing authority. Therefore, we have no other alternative but to set aside the order passed and remand the matter to the assessing authority with a direction to pass a fresh order in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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