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June 14, 2022

The taxpayer must be provided a reasonable opportunity to submit evidence affecting his or her tax liability.

by CA Shivam Jaiswal in Income Tax

The taxpayer must be provided a reasonable opportunity to submit evidence affecting his or her tax liability.

Facts and Issue of the case

The appeal is directed against the order dated February 9, 2022 passed in WPA 1745 of 2021.   By the impugned order, the learned Judge was pleased to hold that, despite the assessee receiving further evidences with regard  to  the  quantum  of  tax liability subsequent  to  the  conclusion  of  the  order of refund, there was no material irregularity in the order of refund  warranting  interference  under Article 226 of the Constitution of India.

Learned Advocate appearing for the appellant/writ petitioner submits that the order of refund was passed on May 3, 2021. Subsequent thereto, the assessee  received  Certificate  of  Export of August 25, 2021. There was no lacuna on the part of the assessee in receiving the  Certificate.  If such Certificate is placed before the revisional authority, the petitioner will be entitled to refund of the tax  liability  of  the  petitioner.  The  Certificate  is a material evidence which the revisional authority needs to consider in order to assess the tax liability of the petitioner.

Learned Advocate appearing for the appellant/writ petitioner submits that the tax authorities cannot derive undue benefit of circumstances which are beyond the control of the appellant/writ petitioner. The tax authorities are obliged to give actual credit for the tax paid. The document dated August 25, 2021 pertains to the liability of tax relating to  the  appellant/writ petitioner and, therefore, ought to  be  taken  note of by the tax authorities. In the event the  impugned order is allowed to stand in the manner of form as it stands today then  the  appellant/writ  petitioner will be deprived of the tax benefits that the appellant/writ petitioner is otherwise entitled to.

Observation of the case

No doubt, the revisional authority passed an order assessing the tax liability of the appellant/writ  petitioner  on  May  3,   2021. However, subsequent thereto, the appellant/writ petitioner received the document dated August 25, 2021 which impacts the tax liability of the appellant/writ petitioner. The  appellant/writ petitiner is not at all fault in not receiving the document dated August 25, 2021 that the appellant/writ petitioner seeks to place before the revisional authority. It is not a case that the appellant/writ petitioner was in  possession  of certain documents which the appellant/writ petitioner did not place before the revisional authority. Rather, it is a case where  the appellant/writ petitioner received a document subsequent to the order of the revisional authority.

Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise  where  the  assessee  was  not in a position to show certain  evidences  which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities.

Conclusion

Court is of the view that another opportunity should be granted to the appellant/writ petitioner to place the document before the revisional authority.

Nipika-Agarwal-Proprietress-of-S.N.-Trading-Vs-Assistant-Commissioner-of-State-Tax-Calcutta-High-Court

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