TMI Blog2016 (1) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... ATHAK M. R. J. Dr. Ashok Saraf, Senior Advocate, A. Goyal, P. Baruah, Z. Islam and P. Das for the petitioner. M. Nath, Standing Counsel, Finance and Taxation Department, Assam, for the respondents. JUDGMENT Heard Mr. Ashok Saraf, learned Senior Counsel assisted by Mr. A. Goyal, learned counsel for the petitioner. Also heard Mr. M. Nath, learned Standing Counsel Finance Taxation Department appearing for the State respondent Nos. 1 to 3. 2. The petitioner company, namely, Ozone Pharmaceuticals Limited, a Limited Company under the Company Act, 1956 having its registered office at New Delhi and a Drug License holder issued by the Drugs Controller of India under the Drugs and Cosmetics Act, 1940 is involved in manufacturing of medicines. It has set up its Industrial unit at EPIP Complex, Amingaon, Guwahati-31 in the district of Kamrup (Rural) and for the said purpose the petitioner company imports raw materials and other ancillaries including eligible and permissible chemicals and other ingredients like flavor, essence, maize starch, packing materials like corrugated box, caps, bottles etc. from the places outside the State of Assam for use in manufacture of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Schedule appended to the Act. WHEREAS in spite of liability under the Assam Entry Tax Act, 2008 you have failed to submit return and pay tax @ 2% on the import of chemicals against ₹ 4,42,12,433/-. WHEREAS on failure to pay tax, you have made yourself liable to pay penalty u/S. 37(2) of the Assam Value Added Tax Act read with Section 8 of the Assam Entry Tax Act, 2001. Therefore, you are now hereby asked to show cause in writing by appearing before the undersigned on 30/03/2011 at 11.00 A.M. as to why assessment shall not be made to the best of my judgment u/S. 37 of the Assam Value Added Tax Act, 2003 read with Section 8 of the Assam Entry Tax Act, 2008 with imposition of penalty equal to 25% of the Tax. Sd/- Illegible (K.Lahary) Assistant Commissioner of Taxes Central VAT Audit Team Attached to the Office of the Commissioner of Taxes, Assam Dispur, Guwahati-6 7. On 31.03.2011 the said respondent No. 3 under the provisions of the Section 8 of the Assam Entry Tax Act and Section 37 of the Assam Value Added Tax Act passed an assessment order against the petitioner's company for the period of 2005-06 on aggregate amount of import value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, freight charges and all others charges incidentally levied on the purchase of such goods. 10. As per the Assessment Proceedings of the Assessing Officer, i.e. the Assistant Commissioner of Taxes, Central Vat Audit, Assam and the Certificate of Audit Audit Report in Form 47 48; it is found that the petitioner company neither submitted return in Form ET-4 ET-5 for the year 2005-06 nor paid entry Tax for the said year, in spite of having liability to pay such tax under the Assam Entry Tax Act, 2001, that was declared unconstitutional on 17.11.2006 only, whereas the assessment year was up to 31.03.2006. 11. The revisional authority, i.e. the Joint Commissioner of Taxes, Assam vide order dated 26.06.2013 passed under Memo No. CVAT-1/2011/(39) while disposing of the revision petition of the petitioner Company under Section 82 of the Assam Value Added Tax Act, 2003, against the assessment order dated 31.03.2011 passed by the Assessing Officer, found that the notice issued vide CTVA-4/2009/13 dated 25.03.2011 was elaborately described, whereas Form 21 does not have such point to describe elaborately. The revisional Court also found that the said notice under Section 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer issued a very elaborate notice to the petitioner company on 25.03.2011 containing more information in comparison to the prescribed Form 21 and as such came to the finding that the notice that contains all the facts which are necessary to understand what is being questioned, cannot be said to have violated the law just on the ground that the notice that was issued to the petitioner company did not adhere to the laid down format. But the ABR found that the Assessing Officer granted only three working days to the petitioner company to reply to the said notice dated 25.03.2011 directing it to appear 30.03.2011 and rejected the prayer of the appellant petitioner company for fifteen days more time to respond the said notice. The said appellate authority also observed that the notice to show cause is given not only to fulfill a mere technicality but to enable the assessee to present his case with proper details and to defend the same. 14. In view of the above, the appellate authority i.e. the ABR by its judgment dated 26.06.2014, without going into the merit of the case against the said order of the revisional authority, dated 26.06.2013 came to the conclusion that the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by considering only those items which are actually classifiable as chemical. By the said representation dated 21.06.2015 the petitioner company also requested the assessing authority to inform them for any documents/information to place on records for classification of the items in question in the manner otherwise then as claimed by it to rebut the same before any adverse order is passed. 16. The Assessing Officer i.e. the Assistant Commissioner of Taxes, Guwahati, Unit-C the respondent No. 3, in terms of the judgment and order dated 26.06.2014 passed by the learned Assam Board of Revenue in case No. 85 STA/2013, noted above, passed fresh assessment order dated 28.08.2015 with regard to the petitioner company for the assessment year 2005-06 under the Assam Entry Tax Rules determined total value of goods imported at ₹ 8,63,37,767/- and tax @2% assessed at ₹ 17,26,755/- and also assessed the interest @ ₹ 9,56,996/- w.e.f. 28.02.2011 and total sum due of ₹ 22,50,151/-.Being aggrieved with said re-assessment order dated 28.03.2015 of the concerned assessing officer preferred this petition on the ground that such determination of Assessing Officer was pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for further time for submission of document/information placed on records for classification of items in question in the manner otherwise as they claimed. From the impugned order it is seen that the assessing officer asked the assessee, i.e. the petitioner to submit the supporting document in support of its contention that most of the items are not chemicals those were found to be chemicals but the assessee failed to appear on the date of hearing and the assessing officer came to the conclusion that the importer/assessee/the petitioner has nothing to say in respect the case and accordingly proceeded to assess the said importer. 19. In the case of HPL Chemicals Limited -Vs- Commissioner of Central Excise, Chandigarh reported in 2006 (5) SCC 208, the Hon'ble Supreme Court have held as follows: 28. This apart, classification of goods is a matter relating to chargeability and the burden of proof is squarely upon the Revenue. If the Departments intends to classify the goods under a particular heading or sub-heading different from that claimed by the assessee, the Department has to adduce proper evidence and discharge the burden of proof. In the present case the said burden h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (SCC p. 254, AIR p. 607, para 35) 'When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause.' (emphasis in original) 30. Similarly, in Hindustan Ferodo Ltd. v. CCE [(1997) 2 SCC 677] it is held in para 4 as under: (SCC p. 679) 4. It is not in dispute before us, as it cannot be, that the onus of establishing that the said rings fell within Item 22-F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, that the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed. 20. In the case of Voltas Ltd. Vs. State of Gujrat reported in (2015) 7 SCC 527 the Hon'ble Supreme Court has held that: 26. Qua the issue of classification of goods to determine the chargeability thereof and the rates of levy applicable, it is no longer res-nnintegra that the burden of proof is on the taxing authority to demonstrate that a particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Bench of the Patna High Court in Doma Sahu Kishun Lal Sao v. State of Bihar [1951 2 STC 37] refused to interfere with the best judgment assessment of a Sales Tax Officer as he took every relevant material into consideration, namely, the situation of the shop, the rush of the customers and the stock in the shop and also the estimate made by the Assistant Commissioners in the previous quarters. 10. Under Section 12(2)(b) of the Act, power is conferred on the assessing authority in the circumstances mentioned thereunder to assess the dealer to the best of his judgment. The limits of the power are implicit in the expression best of his judgment . Judgment is a faculty to decide matters with wisdom truly and legally. Judgment does not depend upon the arbitrary caprice of a Judge, but on settled and invariable principles of justice. Though there is an element of guess work in a best judgment assessment , it shall not be a wild one, but shall have a reasonable nexus to the available material and the circumstances of each case. Though sub-section (2) of Section 12 of the Act provides for a summary method because of the default of the assessee, it does not enable the assessing au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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