ADVOCATE and TAX CONSULTANT
172 Points
Joined February 2011
mam
u have to explian that we have made the genuine purchases, we have placed the purchase order, the seller issued delivery challanand Tax Invoices, Waybills and the same have been reflected in the books of account we are in receipt of tax invoices and have physically received the stocks and reflected the same in our stock books . we have paid consideration through proper channel (bank cheques/dd's), we have filed VAT returns and paid VAT Tax. These evidence is enough to substantiate the case. and moreover the burden lies on the assessing authority . Pls submit the reply as follows .
we submit that this proposal is entirely baseless. No proceedings need be passed on mere suspicion. it is settled law that suspicion how strong may be not a substitute to evidence. Even according to your good selves the selling dealer is a registered dealer. we are in receipt of tax invoices. we have physically received the stocks. we have paid the consideration through proper channel. all the conditions are fullfilled as per the VAT Act. We have rightly claimed Purchases. It cannot be denied on presumptive and fictious grounds. If the above said parties commited any offence or cliamed incorrect, nothing prevents concerned CT/IT Authorities from taking action against that dealer. The respective officials has certainly no authroity or power to advise other assessing authorities not to allow purchases on mere suspicion. The selling dealer has issued official way bills and such way bills we also checked enroute by department officers.
We relied upon a apex court (Hon'ble High court of AP) in the case of State of AP Vs Tungabhadra Industries Ltd., reported in 62 STC 71.
In this context kind attention is invited to the decision of Hon\ble STAT, Hyderabad in the case of Sri krishna Timber Depot, Jammalamadugu Vs State of AP (14 APSTJ238) wherein tis held that "A presumption without basis, on mere suspicion cannot be sustained. Suspicion can only leads to investigation and unearthing material on which any conclusion can be based, but on mere suspicion without further investigation, no inference can be drawn and no conclusions can be arrived at".
The Hon'ble High court of AP on 26.11.2010 in the case of Pest Control India Pvt Ltd., Hyderabad Vs Asst. Commisioner (CT) Hyderabad & Ors (51 APSTJ 230) while disposing the writ petitions observed that " assessment orders are to be passed with objectively and adequate reasons. The obligation to pass orders with quality is directly relatable to the accountability of public servant. When such obligation to pass orders with quality is directly relatable to the accountability of public servant. When such obligation to pass quality orders is given a goby, constitutional remedy of judicial reveiw is rendered futile. The law laid down by the Supreme Court and the High Court with regard to the approach to be bestowed by the assessing officers while assessing the Tax and order XX of code of civil procedure 1908 are to be adhered to while passing the quasi judicial order".
on the same anology we submit that in our case the selling dealer is real and identifiable and has issued tax invoices. Hence by no strech of imagination. Purchases cannot be added to total income, such action of disallowing purchases would be in gross violation of said decisions, which is binding on all the authroities in the state. Further we request to kindlly communicate the same to file our further objections, as no order cand be passed behind the back of the affected person. Without prejudice to the same, we request to drop the poposal, as the same would be illegal, arbitrary and unjustifiable.
We request you to kindly drpo the entire proposal of addition of purchases to total income. If you wish to proceed further kindly give an oppurtunity of personal hearing in the matter in the intrest of justice and equity.
Please file the same immediately before the AO. And wait for further orders.
CAclubindia
