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TMI Blog2019 (3) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as "the Assessing Authority‟) passed on 19.09.2018 for accounting years 2015-16, 2016-17 and 2017-18, whereby the Assessing Authority raised the total demand as shown in the table below. Particulars 2015-16 2016-17 2017-18 Total Tax Rs. 1,17,52,165/- Rs. 1,26,66,365/- Rs. 10,26,891/- Rs. 2,54,45,421/- Interest Rs. 67,22,006/- Rs. 55,57,600/- Rs. 3,41,836/- Rs. 1,26,21,442/- Penalty Rs. 3,40,11,855/- Rs. 3,49,33,427/- Rs. 39,66,952/- Rs. 7,29,12,234/- Outstanding Rs. 5,24,86,026/- Rs. 5,31,57,392/- Rs. 53,35,679/- Rs. 11,09,79,097/- The above stated demand was raised on ground of certain transactions traced by the Investigation Officer during the search operation carried on by the State Tax Authority. (2) Learned Advocate, Mr.Nayan Sheth appeared and submitted that the Assessing Authority has raised aforementioned dues without considering the submission of appellant during the search and assessment proceedings, therefore, it is bad, illegal, arbitrary and against the principle of natural justice and law. Mr.Sheth submitted that against the aforementioned dues, appellant paid Rs. 16,13,899/- at the time of enforcement visit by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrive at any final conclusion, the Unit Officer of appellant issued the notice on 25.07.2018 for cancellation of lumpsum permission. He submitted that pursuant to above stated notice of 25.07.2018, the appellant submitted its reply on 30.07.2018 wherein appellant made detailed clarification for not cancelling lumpsum permission. He submitted that on 03.08.2018, show cause notice was issued by authority calling the appellant on 28.08.2018, is annexed at Page No.89 of paper book. Mr.Sheth submitted that pursuant to notice No.302, which is annexed at Page Nos.91 to 97 of paper book, the appellant was called on 14.14.08.2018 and on said date, appellant submitted the annual return and audit report and requested for further time, is annexed at Page No.98 of paper book. He submitted that appellant deposited Rs. 5,35,415/- on 18.08.2018 calculated at 4% of alleged suppressed sales, copy thereof is annexed at Page Nos.99 to 101 of the paper book. He submitted that thereafter on 11.09.2018, authority called the appellant to remain present on 14.09.2018, copy of said show cause notice is annexed at Page No.102 of the paper book. Mr.Sheth submitted that pursuant to letter dated 11.09.2018, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submission and evidence of appellant, Assessing Authority issued the notice on 11.09.2018 calling the appellant on 14.09.2018 and though the appellant has in advance on 12.09.2018 sought an adjournment as learned Tax Consultant was busy in religious function, without giving any further notice, the best judgement assessment orders have been passed against appellant in exorbitant, arbitrary and illegal manner raising the heavy handed dues. (7) Mr.Sheth has submitted that the orders have been passed in breach of the principle of natural justice as proper opportunity of hearing has not been given to appellant in spite of fullest cooperation extended by it. Mr.Sheth placed his reliance upon the decision of the Hon‟ble Supreme Court of India in the case of Swadeshi Mills V/s. Union of India (1981) 1 SCC 664 and of the Hon'ble Gujarat High Court in the case of BSCPL Infrastructure Ltd. 61 VST 1 (Guj.). He submitted that as per the law laid down in above stated judgements, any orders passed without giving proper opportunity of hearing, are the orders passed in breach of principle of natural justice, therefore, they are required to be set aside. (8) Even on the merits of the cases, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are noted as free supply to owners‟ guests but unfortunately they are wrongly taxed as sales of appellant. (D) Mr.Sheth submitted that with regard to free supply to employees, suppliers and the relatives of Rs. 28,92,045/- is a supply of foods without any consideration, therefore, it does not relate to sales, hence, it does not attract any tax liability. (E) For gift coupons of Rs. 49,47,205/- and Rs. 69,60,440/-, Mr.Sheth submitted that in order to attract customers, discounts are offered or on subsequent visit of customers, some free meals are offered by issuing coupons. He submitted that such transactions are without any consideration and hence, not liable to tax under the provisions of GVAT Act. (10) With regard to assessment notice and show cause, Mr.Sheth submitted that the appellant has made clarification in details with supportive evidences but unfortunately Authority failed to appreciate it either to investigate or to discuss about such submission and passed the orders ignoring submission. He submitted that once the submission along with the supporting evidences are submitted to Assessing Authority, then it becomes the duty of the Assessing Authority to consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, suppose a coupon to give free meal to one person is given in case meal is bought for four persons, in such case, in the sale bill issued though consideration is charged for four persons, the number of persons is stated as five. Accordingly, five persons will take meal even though consideration is paid for four persons. He submitted that it is standard practice of appellant not to allow to enter any person in the dining area without verification of valid bill by appellant. Such sale bills were verified by the learned officer of the department, Mr.R.M.Prajapati while he visited the business place of appellant, therefore, there is no question of meal being served by the appellant without meal coupons. (14) According to Mr.Sheth, the learned officer has laid stress on the payment of tax for the sales of Rs. 41,93,280/- at the time of visit to substantiate its conclusion. With regard to such conclusion, Mr.Sheth submitted that in the statement given at the time of visit on 16.02.2018 which is on Page Nos.67 to 69 of the paper book, the appellant had categorically submitted that the transactions in the computer disc did not relate to sales. Mr.Sheth submitted that under law, no deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es submitted by appellant. He submitted that the reasons given for not accepting submissions of the appellant are nothing but merely an attempt of eye wash. (19) Mr.Sheth submitted that appellant has made payment of 16.9% of the total tax dues, therefore, it should be treated as sufficient payment for admitting second appeals and granting stay against recovery of dues. He submitted that all the second appeals may be allowed and may be remanded to First Appellate Authority to decide the first appeals on merits with condition of stay against recovery till the final disposal of first appeals without any further payment of pre-deposit. (20) Learned Government Representative, Mr.P.J.Pujara strongly objected to submission. He primarily submitted about the business profile of appellant stating that the appellant is having the registration certificate No.24073800958 and engaged in the business of serving the food at restaurant. He submitted that the appellant was granted the permission for composition under Section 14 D of the GVAT Act. He submitted that during the surprise visit, it was found that the appellant has evaded the tax by unaccounted sales and deleted the data of "cash sales& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t details of certain business transactions were deleted and same were recovered with the help of computer expert therein one folder was found, namely, "HARSH‟. He submitted that based on such recovered data, unaccounted "Cash Sales‟ transactions of Rs. 2,67,28,995/-, Rs. 2,60,95,198/- and Rs. 1,84,85,348/- during the financial years 2015-16, 2016-17 and 2017-18 respectively were traced by the Authority. (23) Pertain to data recovered from the hard disc of computer, Mr.Pujara emphasized on the fact that in relation to the same account, different explanation is given and therefore, the submission of the appellant is not acceptable. He submitted that in respect of the same account, for some transactions the appellant is claiming estimates, while some as relating to promotional expenses or free food to guests, employees, suppliers and their relatives or free supply on coupons. Thus for the same account, the appellant is giving different explanations and therefore, it was rightly rejected by the learned Assessing Authority. Thus the explanation of appellant does not have any merit. (24) Learned Government Representative submitted that the appellant has failed to produce bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences, therefore, 100% enhancement in turnover is justified. He also submitted that since bills were not issued for unaccounted transactions, imposition of penalty under Section 60 (3) is correct and legal. Similarly, in view of evasion of tax by the appellant, penalty imposed under Sections 34 (7) and 34 (12) of the GVAT Act is just and proper. (27) Learned Government Representative drew the attention of bench towards the paragraph 9 of its pursis wherein it is stated that from the date of issue of notice for assessment till the date of passing the orders, appellant has frequently avoided to remain present before the Assessing Authority with its books of accounts and evidences. He submitted that under one or another reasons, appellant has avoided to remain present with books of accounts, therefore, at no option, Assessing Authority passed the orders. He submitted that considering the opportunity availed to appellant by Assessing Authority, principle of natural justice is not violated. He submitted that based on the evidence derived from the computer of appellant, Assessing Authority has passed the orders after giving the show cause notice to appellant, therefore, it is speaking a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative. It is also not a matter of dispute and doubt that the appellant remained present on many dates given by Assessing Authority, but on the last date fixed, the appellant had sought adjournment on ground of pre-occupation of his learned Consultant and the learned Officer did not grant the adjournment and proceeded to pass ex-parte assessment orders raising heavy handed dues without appreciating the submission and evidence of appellant. (B) We understand a case of passing of ex-parte assessment orders whether a dealer had completely non-cooperated and simply wasted time by seeking adjournments, however, this case is different. Not only on number of dates, the appellant has caused appearance but it has also given written submissions supported by evidences. In these facts of case, when on the last date fixed, appellant sought adjournment and that too for reasons of his learned Consultant being pre-occupied, the learned Assessing Authority should have granted further opportunity of hearing to appellant before passing any orders against it. It also appears from the submission of Mr.Sheth that appellant had submitted files of evidences with reply submitted on 17.03.2018 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate that Assessing Authority has acted against the principle of natural justice and law. Such orders passed in absence of speaking and reasoned manners are like a "Inscrutable face of sphinx" Considering the above stated facts and reasons, this Tribunal cannot ignore that the appellant has paid in all Rs. 43,71,922/- as against the tax liability of Rs. 2,54,45,421/- which comes to approximately 16.9% of tax dues raised by the Assessing Authority. It is also a reality that the Assessing Authority failed to appreciate the submission made by the appellant with evidences in three files on 19.03.2018 without making further enquiry or investigation thereupon framed the heavy handed tax liability. Such act of the Assessing Authority is a clear breach of principle of natural justice and law. Even First Appellate Authority without appreciating the facts, law and submission made by the appellant, mechanically passed the orders directing the appellant to pay 25% of total dues towards pre-deposit for all above three appeals, does not seem to be fair and reasonable. Therefore, based on the factual and legal discussion and considering the prima facie case, we believe that the direction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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