TMI Blog2019 (11) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... see for the assessment year in question. On the facts of the instant cases, the material produced by the assessees to support their claim for deduction of a substantial part of the turnover, on which, tax had already been paid by their sub-contractors, ought to have been considered by the Assessing Authority while competing the assessment in relation to the petitioners. The non-consideration of the said material by the Assessing Authority vitiates the assessment orders that are impugned in these writ petitions. To enable the Assessing Authority to pass fresh orders as directed, the petitioners in the said writ petitions are directed to appear before the Assessing Authority, at his Office, at 11.00 a.m. on 28.10.2019. The Assessing Authority shall pass fresh orders, as directed, within one month thereafter - Petition allowed by way of remand. - WP(C). 7122/2019, WP(C).9073/2019, WP(C).11489/2019, WP(C).11524/2019 And WP(C).19762/2019 - - - Dated:- 16-10-2019 - JUSTICE A.K. JAYASANKARAN NAMBIAR For The PETITIONER : ADVS. SMT. K. LATHA G. SHIVADASS, SR., ADVS. SMT. K. LATHA, G.SHIVADASS, SR., ADVS.SRI.SHAJI THOMAS, SRI.JEN JAISON G. SHIVADASS, SR., ADVS.SRI. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against them. The petitioners did not, however, incorporate the details of these certificates in the returns that were filed by them before the respondents. Further, although the petitioners sought for a permission to revise the returns for the said assessment years, based on the certificates that were subsequently obtained by them from the sub-contractors, the said request for revision of returns was rejected by the respondents inter alia on the ground that penal proceedings had been initiated against the petitioners in the meanwhile, and therefore, there was a bar to the revision of returns for the said assessment year. The orders rejecting the request for revision of returns have been impugned by the petitioners in W.P.(C).No.11447/2019 and W.P. (C).No.11461/2019, which are dealt with in a separate judgment delivered today. 4. The impugned assessment orders in W.P. (C).No.11524/2019 and W.P.(C).No.11489/2019 reveal that, although in reply to the pre-assessment notices received by them, the petitioners had furnished the details of the Form 20H certificates that had been obtained by them from the sub-contractors, and claimed deduction of the amounts covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, there is no statutory provision that prevents the Assessing Officer from independently considering the statutory certificates that have been obtained from the sub-contractors, evidencing payment of tax, at their end, and in respect of the very same work on which the petitioners were assessed for the year in question. It is pointed out that, had the Assessing Officer perused the statutory certificates obtained from the sub-contractors, he would have been forced to effect a substantial reduction in the turnover estimated for the purposes of assessment, leading thereby to a reduced tax liability for the petitioners in their respective assessments for the assessment year 2012-13. Similarly, assailing the penalty orders impugned in the writ petitions, it is the contention of the learned senior counsel that under Section 67 of the KVAT Act, the Intelligence Officer is not expected to embark upon a roving enquiry, that is more suited to the assessment procedure to be followed by the Assessing Authority, and if he does so, then that would be an exercise of estimation of turnover, which is not open to the Intelligence Officer while adjudicating penalty proceedings. Reliance is placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in Larsen Toubro's case [supra] is once again distinguished on the facts and circumstances of the case. 8. I have considered the rival submissions and also perused the orders impugned in these writ petitions. I have also taken note of the decisions in U.K. Monu Timbers case and Flipkart [supra] cited across the bar. 9. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I am of the view that, inasmuch as the petitioners had, in the assessment proceedings before the Assessing Authority under the KVAT Act, produced the Form 20H certificates obtained by them from the sub-contractors, evidencing the turnover on which tax was paid by the sub-contractors, it was not open to the Assessing Authority to disregard the said material while completing the assessment in relation to the petitioners. As rightly pointed out by the learned senior counsel, there is no statutory prohibition in considering material that is produced by the assessee at the time of hearing before the Assessing Authority merely because the said material was not included in the return that was filed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to pass orders of penalty in matters such as these, where, it was only pursuant to an assessment proceedings that the issue of possible evasion of tax by an assessee could be determined. As noticed in the aforesaid judgments, it is not in the domain of an Intelligence Officer adjudicating a penalty proceedings to embark upon a roving enqiry and thereafter estimate the tax payable by the assessee for the purposes of quantifying a penalty on the said assessee. If such a course of action is permitted, then it would lead to an undesirable situation where, the authority entrusted with imposition of penalty usurps the powers accorded under the fiscal statute to the Assessing Authority, and a possibility of divergent views being taken in relation to an assessee by two Officers of the same Department. In my view, in cases where there is an uncertainty with regard to the real nature of the transaction, as also where there are factors that may have a bearing on the estimation of turnover, which are to be considered by the Assessing Authority, the Intelligence Officers ought ideally to refer the matter to the Assessing Authorities concerned to arrive at a finding with regard to liability t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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