₹308 Cr Tax Demand Stayed as Import Addition Breached Natural Justice: Bombay HC

Savli Copper Products Private Limited Vs ITO (Bombay High Court)

Summary: Stay of high-pitched tax demand granted where the addition for alleged unexplained import expenditure was prima facie vitiated by breach of natural justice due to non-furnishing of invoice-wise and bill-of-entry-wise data; the requirement of 20% deposit under administrative instructions was held not to fetter the Court’s power to grant stay.

Core Issue

Whether recovery of a demand of Rs. 308,30,37,290/- arising from an addition of Rs. 290,61,87,535/- under section 69C towards alleged unexplained import expenditure should be stayed during pendency of the first appeal where the assessee had repeatedly sought invoice-wise and bill-of-entry-wise import data but the Assessing Officer furnished only consolidated figures, and whether the Revenue could insist upon payment of 20% of the demand pursuant to administrative Office Memoranda as a precondition for stay.

Facts

The assessee, a private limited company engaged in trading and manufacturing copper products, filed its return for AY 2023-24 declaring total income of Rs. 7,06,27,395/-. During assessment proceedings, the Assessing Officer questioned the assessee regarding import transactions allegedly amounting to Rs. 1,796.24 crore and subsequently revised the figure to Rs. 1,476.04 crore on the basis of information available with the Department. The assessee repeatedly requested invoice-wise and bill-of-entry-wise details so that the alleged discrepancy could be reconciled. The information supplied by the AO, however, contained consolidated monthly figures and the assessee pointed out that certain entries appeared to be repeated.