Sales Tax Assessment Based on Document Seizure During Survey: Allahabad HC Finds Commercial Tax Tribunal's Relief Adequate [Read Order]
The High Court upheld the best judgment tax assessment, since the Tribunal had already granted adequate relief, thus no further Interference was required.
In the recent ruling, the Allahabad High Court upheld the best judgment tax assessment arising from documents seized during a 2016 survey, whereby the Commercial Tax Tribunal had already granted substantial relief based on the suppression found. Thus, finding no scope for further interference, the High Court dismissed the revision petition.
The Revisionist, M/S Abhishek Traders, engaged in the business of Civil Work Contract for Government and Semi-Government, had filed revision against the order dated 04.02.2025 passed by Commercial Tax Tribunal, Agra in Second Appeal No.73 of 2024. The revision was admitted by this Court on 08.02.2025.
The Revisionist faced a survey at its business premises on 22.09.2016, in which certain documents were seized in six exhibits. Out of these, Exhibits No. 1, 2, and 3 were subsequently treated as adverse to the Revisionist. Based on these findings, a notice was issued, to which the Revisionist duly replied. However, the Assessing Authority, not being satisfied with the reply, proceeded to pass a best judgment assessment order on 30th March, 2024.
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Further, aggrieved by the best judgement assessment, the Revisionist filed a first appeal, which was dismissed. Subsequently, a second appeal was filed before the Commercial Tax Tribunal, Agra, which was partly allowed by the impugned order dated 04.02.2025.
The Counsel for the Revisionist, Pranjal Shukla, submitted that Exhibits No. 1, 2, and 3, which formed the basis of the adverse assessment, did not pertain to the Revisionist's business but belonged to an Accountant named Pramod Kumar, against whom an FIR had been lodged for the alleged mischief. He also submitted that the Revisionist had brought on record various materials and certificates, including those from the persons whose names appeared in Exhibits No. 1 and 2, certifying that no transactions were undertaken with them by the Revisionist.
Further, the Counsel submitted that the revisionist emphasized that once the burden of proof was discharged by presenting such certificates, it became incumbent upon the respondent authorities to rebut the same with cogent material demonstrating suppressed purchases and sales by the Revisionist.
In support of these submissions, the counsel placed reliance on the judgment of the Court in the case of M/s B. S. Enterprises Vs. The Commissioner of Commercial Tax U.P. Lucknow in Sales/Trade Tax Revision No. 94 of 2020.
On the other hand, the Counsel for the Opposite Party, Additional Chief Standing Counsel (ACSC), supported the impugned order and highlighted that neither in the grounds of appeal nor before the High Court were any averments made that material evidence was available before the lower authorities but not considered. Thus, fresh evidence filed for the first time along with the revision could not be accepted.
The Counsel further stated that the entries in Exhibits No. 1 and 2, according to the State, clearly indicated suppressed purchases and sales by the Revisionist, thereby empowering the Assessing Authority to make a best judgment assessment after rejecting the Revisionist's books of accounts.
The High Court composed of Justice Piyush Agrawal, heard and reviewed the matter filed by the revisionist.
After hearing the submissions and considering the materials on record, the High Court observed that the survey on 22nd September, 2016, led to the seizure of documents, three of which were treated against the Revisionist, forming the basis of the best judgment assessment. The matter travelled up to the Commercial Tax Tribunal, which, being the last court of fact and law, had duly considered the matter and partly allowed the appeal filed by the Revisionist, granting substantial relief with the seizure of documents found during the survey.
“The tribunal being the last court of fact and law after due consideration have partly allowed the appeal filed by the revisionist and have granted substantial relief which commensurate to the seizure of documents found at the time of survey.”
The court further relied upon the judgement by the appellant in the case of M/s B.S. Enterprises (supra) which justified an enhancement of turnover to the extent of 10%. Considering that a best judgment assessment had been made and substantial relief had already been granted by the Tribunal, acting as the final court of fact and law, the Court found no compelling reason to interfere with the impugned order.
Thus, the Revision was dismissed on November 26, 2025.
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