Review u/s 87(4) VAT Act Not Maintainable Without Post-Revision Discovery of Concealment: WB Tax Tribunal
The West Bengal Taxation Tribunal held that review under Section 87(4) of the VAT Act is permissible only upon post-revision discovery of concealment or false declarations by the dealer.
In a recent ruling, the West Bengal Taxation Tribunal held that a review under Section 87(4) of the West Bengal Value Added Tax (VAT) Act, 2003, is maintainable only if there is a post-revision discovery of concealment or false declarations by the dealer.
Emami Agrotech Ltd., a company engaged in the interstate sale of edible oil, was subjected to a demand notice and subsequent assessment under the WB VAT Act after the cancellation of Form C declarations by the Delhi VAT authorities. These declarations submitted by purchasing dealers in Delhi were later found to have been issued by fictitious entities, leading to tax liability reassessments by West Bengal authorities.
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After partial relief in a revisional order dated March 14, 2018, the Senior Joint Commissioner filed a review petition before the Revisional Board under Section 87(4), claiming new evidence of concealment based on transport verification reports.
The company’s counsel argued that the review application was not maintainable, as the evidence cited by the department, vehicle search reports from the Ministry of Road Transport and Highways, was available before the 2018 revisional order. They argued that such information could not qualify as a "discovery" after the revision, which is a precondition for invoking Section 87(4). They further argued that the departmental representative, who filed the review petition, lacked the statutory authority under the Act to initiate such proceedings.
The respondents’ counsel claimed that the vehicle reports revealed that most trucks used in the alleged sales did not have national permits and were only fit for local transport, suggesting fictitious movement of goods. They submitted that this amounted to concealment and justified the review to prevent revenue loss.
The tribunal bench presided over by Justice Sambuddha Chakrabarti, along with Judicial Member Arpan Kumar Chattopadhyay and Technical Member Amit Chakraborty, observed that the statutory framework of Section 87(4) permits review only when there is a clear post-revision discovery of concealment or misstatement by the dealer.
The tribunal further observed that the facts cited in the review petition had existed before the revisional order and could not be relied upon as fresh discovery. The tribunal also found that the review application was based on grounds not raised in the petition, rendering the process procedurally flawed.
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The tribunal ruled that the review petition filed by the Revenue was not maintainable under Section 87(4) and that the Revisional Board had exceeded its jurisdiction in entertaining and deciding the matter. The tribunal set aside and quashed the impugned order, holding that all other findings in the Board’s decision were irrelevant and unwarranted. The petition was allowed.
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