Assessment based on Facebook post is bad in law: Kerala HC
Facts and Issue of the case
Aggrieved by the decision of Ext.P6 the petitioner filed appeal in Kerala High Court. The facts of the case are as follow
1.State Tax Officer assessed the tax payer for assessment year 2017-18, treating the product of the petitioner as a branded item, for determining the rate of tax.
2.In year 2019, facebook post published by the son of the petitioner in the year 2019 regarding the starting of business in branded rice.
The petitioner’s learned counsel claims that the business of selling branded rice was not started by the petitioner during the 2017–2018 financial year and that even the machinery for dealing was only acquired in 2019. It is claimed that a facebook post made by the petitioner’s son in 2019 about beginning a business selling branded rice appears to have served as the foundation for the legal action that resulted in the Ext.P6 order. It is claimed that the assessing officer did not take the petitioner’s arguments in Ext.P6 into account. It is also submitted that even if the facebook post was to be taken into account, the same cannot be a material for completing assessment against the petitioner for financial year 2017-18 as the facebook post itself was only in the year 2019.
According to the learned Senior Government Pleader, the petitioner has a sufficient alternative remedy of appealing under Section 107 of the CGST/SGST Acts, hence the learned Senior Government Pleader objects to the grant of any relief to the petitioner. It is claimed that the contested order was issued in July, making the writ petition itself extremely late. It is also pointed out that recovery proceedings have been initiated following the demand raised on account of Ext.P6 order.
The learned attorney for the petitioner asserts that the conclusion that materials such website information cannot be taken into account is supported by the court’s ruling in M/s. Ozone Granites [P] Ltd v. The Intelligence Officer, Commercial Taxes and others [2018(3) KHC 906].
Observation of court
After hearing to the both party court observed that the petitioner has a right to succeed, according to both the petitioner’s counsel and the learned Senior Government Pleader for the respondents. Ext.order P6’s reveals that the petitioner was the target of the proceedings because of some facebook posts that indicated the petitioner was a seller of branded rice.
The contentions taken by the petitioner that the facebook post itself was of the year 2019 and the assessment proceedings were for the year prior to that does not seem to have been considered by the assessing authority. Further, the contention taken by the petitioner that the petitioner started dealing in branded rice only after the financial year in question has also not been adverted to by the assessing officer. Therefore, Ext.P6 is quashed, the matter is remanded to the file of the 1st respondent, who shall pass fresh orders after affording to the petitioner an opportunity of being heard and also giving to the petitioner an opportunity of producing such documents and materials as he may wish to rely on.
The decision is in favour of petitioner . The contentions taken by the petitioner that the facebook post itself was of the year 2019 and the assessment proceedings were for the year prior to that does not seem to have been considered by the assessing authority. The Court quashed the decisionSyamaldas-Kumaran-V.s-State-Tax-Officer
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