HC Set Aside Order Confirmed on Basis of Statement Recorded During Inspection Without Considering Returns and Reply

Case Details: Tvl. Murugesan Kesavan v. State Tax Officer - [2024] 160 taxmann.com 204 (Madras)

Judiciary and Counsel Details

• • Senthilkumar Ramamoorthy, J.
  • S.P. Sri Harini & R. Prabakaran for the Petitioner.
  • T.N.C. Kaushik ASP(T) for the Respondent.

Facts of the Case

In the present case, the petitioner was running a provision store and was engaged in trade of products such as rice, sugar confectionery, bread and tobacco products. Pursuant to surprise inspection conducted by intelligence wing officials at place of business of assessee, a statement was recorded and according to petitioner, he was coerced to sign said statement.

Thereafter, an intimation and show cause notice were received by petitioner, and show cause notice was replied by stating that it had filed returns for each relevant assessment years without default but the assessment orders were issued on best judgment basis. It filed writ petition against the best judgement assessment order.

High Court Held

The Honorable High Court noted that the said tax demand and penalty were confirmed entirely on basis of statement recorded and prima facie, such statement appeared to be based on stock position as on that date when inspection as conducted. However, the impugned assessment orders did not take into account returns, reply documents annexed thereto. Therefore, the Court held that the said orders were not sustainable and same were to be quashed and matter was remanded back for consideration.