TMI Blog2015 (1) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeared before opposite party No.2 on 21.10.2013 and 12.11.2013 along with purchase register, purchase bills, sales registers and sale bills for verification. Petitioner on the said dates prayed opposite party No.2 to provide the report for submission of reply on the allegation made against it. On 26.11.2013, the petitioner submitted a written note praying opposite party No.2 to provide a copy of the report. Opposite party No.2 without providing a copy of the report completed the impugned assessment under Annexure-1 raising demand of ₹ 8,34,77,727/- towards tax, interest and penalty. Hence, the present writ petition. 3. Mr.D.Pati, learned counsel for the petitioner submitted that the allegations on the basis of which the impugned assessment order has been passed are false and fabricated. The main plank of argument of Mr.Pati is that before completing the assessment under Section 43 on the basis of the adverse materials contained in the report, the same was not confronted to the petitioner. No reasonable opportunity of hearing was afforded to the petitioner for submission of its explanation against the allegations raised in the report. Therefore, it was submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tine business activities and knowingly avoiding to submit the written compliance for his defence. Considering the allegation contained in the tax evasion report submitted by the Deputy Commissioner of Commercial Enforcement, Sambalpur true and correct, the re-assessment order is decided as per fraud case report basing on the information and materials available in the record on merit. 8. Perused the assessment records produced by Mr.Kar from which it reveals that pursuant to the notice issued for assessment of escaped turnover, the petitioner appeared from time to time before the Assessing Officer with books of account and the case was partly heard. Order sheet does not reveal that the materials utilized against the dealerpetitioner in the assessment order were confronted to him and his explanation against each of the allegation was recorded by the Assessing Officer. Statement of the petitioner recorded on 12.11.2013 in course of assessment proceeding is available at page 23 of the assessment record. It would be relevant to extract here the contents of said statement dated 12.11.2013. Today, i.e., on 12.11.2013 (Tuesday) at about 11 am, I appeared before the Sales Tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials 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. 11. The Hon ble Supreme Court in State of Kerala v. K. T. Shaduli Yusuff [1977] 39 STC 478 held as under: ... The tax proceedings are no doubt quasi-judicial proceedings and the sales tax authorities are not bound strictly by the rules of evidence, nevertheless the authorities must base their order on materials which are known to the assessee and after he is given a chance to rebut the same. ... 12. In Kishinchand Chellaram v. Commissioner of Income-tax, Bombay City II [1980] 125 ITR 713, the Hon ble Supreme Court held that it was true that proceedings under the income-tax law were not governed by the strict rules of evidence, and, therefore, it might be said that even without calling the manager of the bank in evidence to prove the letter dated February 18, 1955, it could be taken into account as evidence. But before the Income-tax authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s behind the back of the assessee. It is not necessary that 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. 18. Considering the facts and circumstances of the case as well as the decisions of the Hon ble Supreme Court and this Court, we are of the considered opinion that 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 assessing officer in the assessment order either accepting or rejecting the same. 19. The next question relates to the 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? We should keep in mind that in order to plug the leakage of revenue, the fiscal statutes provide various measures to be taken by the departmental officers including surpris ..... X X X X Extracts X X X X X X X X Extracts X X X X
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