HC Upheld Assessment Order Imposing Tax & Penalty Based on Diary Entries Discovered During SIB Inspection

Case Details: Jalsa Resorts v. State of U.P. - [2023] 150 taxmann.com 306 (Allahabad)

Judiciary and Counsel Details

• • Dinesh Kumar Singh, J.
  • Vaibhav Krishna, Mohit Pandey & Ratnesh Chandra for the Petitioner.
  • C.S.C. for the Respondent.

Facts of the Case

The petitioner’s resort was used for organizing marriages and other functions. The premises of resort were inspected by Special Investigation Branch. Thereafter, a notice under section 74 was issued to petitioner demanding tax, penalty and interest on ground of entries found in diary recovered by Special Investigation Branch. It was noticed that assessee had received much more advance than the amount which was shown in GST returns.

The petitioner did not produce relevant documents for assessing correct tax from July, 2017 to March, 2018 and order was passed demanding amount of Rs.48,96,000. It filed appeal against the demand & assessment order and the Appellate Authority had reduced amount to Rs. 38,56,680 after examining documents submitted by the petitioner. It filed writ petition against the impugned orders and contended that due to ill health, he was not in a position to produce relevant documents at time of raid.

High Court Held

The Honorable High Court noted that the order was passed on the basis of information available with the officers and the Appellate Authority had examined each and every document submitted by petitioner as well as documents recovered by Special Investigation Branch. The contention of petitioner that he was not well and he was admitted in a hospital at time search was made by Special Investigation Branch could not be sustained since he should have produced all relevant documents before Assessing Authority in pursuance to show cause notice issued.

Therefore, the Court held that there was no substance in submission of petitioner that assessment order was based on presumption. Thus, the petition was liable to be rejected as there was no error in the impugned orders.