Income Tax Act| Not Necessary That Assessment Order Should Contain Reference Or Discussion To Disclose Satisfaction In Respect Of Each & Every Query Raised: Bombay HC
The Bombay High Court reiterated that it is not necessary that the assessment order should contain reference and/or discussion to disclose its satisfaction in respect of each and every query raised.
The Court was deciding a writ petition preferred by a company engaged in import, manufacture, and supply of medical equipments.
A Division Bench of Justice K.R. Shriram and Justice Jitendra Jain observed, “We garner support for this view from a judgment of this Court in Aroni Commercials Limited Vs. The Deputy Commissioner of Income Tax-2 (1)1, where the Court, while dealing with the provisions of Section 148 of the Income Tax Act, 1961, held that once a query is raised during the assessment proceedings and assessee has replied to it, it follows that the query was subject matter of consideration of Assessing Officer while completing the assessment and same is deemed to have been accepted. The Court also held that it is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the each and every query raised.”
Senior Advocate Sharan Jagtiani appeared for the petitioners while Advocates Niranjan Shimpi and Jitendra B. Mishra appeared for the respondents.
Brief Facts -
In 2021, the petitioner company imported “used haemodialysis machines” vide Bill of Entry for supply to the dialysis centre at the hospital of the respondent. The Bill of Entry contained an examination order stating that the Customs Department shall get concerned goods certified by a Chartered Engineer that the imported goods were not hazardous waste or e-waste. The petitioner also imported another consignment of identical haemodialysis machine and the same were cleared by the Custom Authorities and installed at the hospital of the respondent. Both consignments were examined by the empanelled Chartered Engineers at the Customs, who certified that “used haemodialysis machines” were not hazardous waste or e-waste and the petitioner paid duty of Rs. 6,03,736/- on or about February 10, 2021.
The Additional Commissioner of Customs by communication raised an objection vide a query disallowing clearance of the said goods alleging violation of Hazardous and other Wastes (Management, Handling and Trans-Boundary Movement) Rules, 2016. This was followed by a virtual hearing granted by Deputy Commissioner of Customs. The petitioner submitted a detailed representation to the Commissioner, Additional Commissioner of Customs and the Deputy Commissioner of Customs reiterating that “used haemodialysis machines” did not contain any hazardous or other waste as defined under the said Rules. The petitioner requested that the said goods be allowed to be cleared. Thereafter, the respondent issued the order by directing the petitioner to pay additional basic customs and any other additional duty or surcharge or cess as may be applicable. Challenging the same, the writ petition was filed before the High Court.
The High Court in view of the above facts said, “In our view, once the show cause notice is issued making certain allegations and petitioner is called upon to show cause as to why action should not be taken and petitioner has replied to it and attended the personal hearing, not giving a finding on that issue after recording copiously the submissions of petitioner would mean that respondent no.3 was satisfied with the explanation given by petitioner.”
The Court noted that since there is no discussion or finding on the issue of hazardous waste in the impugned order, the respondent should be taken as having accepted petitioner’s explanation.
“In the impugned order, respondent no.3 has strangely gone ahead and rejected the assessable value as Rs.50,14,653/- and re determined the value of the said goods as Rs.56,79,450/-. Based on this finding, he has also ordered confiscation of the said goods under Section 111(d) of the Customs Act and given an option to petitioner to redeem the said goods on payment of redemption fine of Rs.3,00,000/- under Section 125 of the Act for the purpose of re-export only. Penalty of Rs.1,00,000/ also was imposed upon petitioner under Section 112(a)(i) of the Act”, it added.
Accordingly, the Court disposed of the petition and set aside the impugned order.
Cause Title- Hemant Surgical Industries Ltd. & Ors. v. Union of India & Ors. (Neutral Citation: 2024:BHC-OS:11180-DB)
Appearance:
Petitioners: Senior Advocate Sharan Jagtiani, Advocates Tamanna Tavadia-Naik, and Vikram Naik.
Respondents: Advocates Niranjan Shimpi, Jitendra B. Mishra, Rupesh Dubey, and Ashutosh Mishra.
