RATHI UDYOG LTD Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE present appeal under section 36 of the Haryana Value Added Tax Act 2003 (for short, "the Act") is directed against an order dated November 8, 2011, passed by the Haryana Tax Tribunal (for short, "the Tribunal") affirming an order passed by the Joint Excise and Taxation Commissioner (Appeal), Faridabad and that an order dated April 21, 2000, passed by the Excise and Taxation Officer -cum -Assessing Authority, Faridabad. The appellant has claimed following substantial questions of law in respect of assessment year 1995 -96:

(2.) INITIALLY , the Assessing Authority finalized the assessment under section 28(3) of the Haryana General Sales Tax Act, 1973 (for short, "the 1973 Act") on April 16, 1998. Subsequently, a show -cause notice was served upon the petitioner on March 23, 2000 after it was discovered that the turnover of the assessee has escaped assessment during the year in question as the appellant has made unaccounted sales of iron and steel to M/s. Khandelwal Steel, Gurgaon. In the show -cause notice, it was stated that the appellant has suppressed sales amounting to Rs. 1,39,727 on an average per day and as to why an addition of sales worth Rs. 4,37,34,602 be not added to the gross turnover. The appellant filed its reply admitting that the sales worth Rs. 31,41,663 exclusive of tax could not be reflected in the returns due to bona fide omission of their clerk for the period May 1, 1995 to May 30, 1995.

(3.) THE learned counsel for the appellant has vehemently argued that the best judgment assessment could be resorted to only after the rejection of books of accounts that too during the course of assessment proceedings. The assessing officer while issuing show -cause notice has quantified the daily turnover for addition to the gross turnover without returning a finding that account books produced by the appellant are to be rejected. It is only after recording a finding and that too after giving an opportunity of hearing to the appellant, the account books could be rejected by the Assessing Authority and could proceed to frame best judgment assessment. Since no such procedure was adopted, therefore, the order passed under the Act are not sustainable. It is also argued that the Assessing Authority has made addition at the rate specified for the entire financial year, though there was discrepancies in the account books in the month of May 1995 only.