Chattisgarh High Court
State Of Chhattisgarh vs M/S Tata Teleservices Limited on 18 August, 2022
1
AFR
HIGH COURT OF CHHATTISGARH BILASPUR
WA No. 687 of 2018
1. State of Chhattisgarh Through Its Principal Secretary,
Commercial Tax Department, Mantralaya, Raipur
Chhattisgarh.
2. The Commissioner, Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer, Circle-5, Raipur Chhattisgarh.
---- Appellants
Versus
M/s Tata Teleservices Limited Having Its Registered Office At
Tower-1, 10th Floor, Jeevan Bharti, 124, Connaught Circus, New
Delhi- 110001 And Branch Office At Guru Ghasidas Plaza
Complex, IInd And IIIrd Floor, G.E. Road, Amapara Chowk,
Raipur 492001 (Chhattisgarh) Through Its Authorised Signatory
And Manager Mr. Ravi Notwani.
---- Respondent
WA No. 691 of 2018
1. State of Chhattisgarh Address - Through Its Principal
Secretary, Commercial Tax Department, Mantralaya, Raipur
Chhattisgarh.
2. The Commissioner Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer Circle- 5, Raipur Chhattisgarh.
---- Appellants
Versus
M/s Tata Teleservices Limited Address - Having Its Registered
Office At Tower - 1, 10th Floor, Jeevan Bharti, 124, Connaught
Circus, New Delhi 110001 And Branch Office At Guru Ghasidas
Plaza Complex, Ilnd And Illrd Floor, G. E. Road, Amapara Chowk,
Raipur 492001 Chhattisgarh, Through Its Authorised Signatory
And Manager Mr. Ravi Notwani.
---- Respondent
WA No. 705 of 2018
1. State of Chhattisgarh Through Its Principal Secretary,
Commercial Tax Department, Mantralaya, Raipur
Chhattisgarh.
2. The Commissioner, Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer, Circle-5, Raipur Chhattisgarh.
---- Appellants
Versus
M/s Tata Teleservices Limited Having Its Registered Office At
Tower-1, 10th Floor, Jeevan Bharti, 124, Connaught Circus, New
Delhi- 110001 And Branch Office At Guru Ghasidas Plaza
Complex, IInd And IIIrd Floor, G.E. Road, Amapara Chowk,
Raipur 492001 (Chhattisgarh) Through Its Authorised Signatory
And Manager Mr. Ravi Notwani.
---- Respondent
For Appellants : Mr. Vikram Sharma, Deputy Govt. Advocate
For Respondent : Mr. Sumit Nema, Senior Advocate assisted by
Mr. Anand Dadariya, Advocate
Date of hearing : 05.07.2022
Date of Judgment : 18.08.2022
Hon'ble Shri Arup Kumar Goswami, Chief Justice
Hon'ble Shri Parth Prateem Sahu, Judge
C A V Judgment
Per Arup Kumar Goswami, Chief Justice
Heard Mr. Vikram Sharma, learned Deputy Government
Advocate for the appellants. Also heard Mr. Sumit Nema, learned
senior counsel, assisted by Mr. Anand Dadariya, learned counsel,
appearing for the respondent.
2. Three separate re-assessment orders, all dated 26.12.2016,
under Section 22(1) of the Chhattisgarh Value Added Tax Act, 2005
(for short, 'VAT Act') had been passed for the period 01.04.2010 to
31.03.2011 (Assessment Year 2010-11), for the period 01.04.2011 to
31.03.2012 (Assessment Year 2011-12) and for the period 01.04.2012
to 31.03.2013 (Assessment Year 2012-13). Three separate writ
petitions came to be filed, namely, Writ Petition (T) No.77 of 2017 in
respect of Assessment Year 2010-11, Writ Petition (T) No.78 of 2017
in respect of Assessment Year 2011-12 and Writ Petition (T) No.79 of
2017 in respect of Assessment Year 2012-13. Identical prayers were
made in the writ petitions except the change in the Assessment Year.
It would be appropriate to extract the prayers made in Writ Petition (T)
No.77 of 2017 :
"10.1 That, this Hon'ble Court may kindly be
pleased to quash to Instruction No.12/2013 dated
05.07.2013 (P/2) issued by the Commissioner
respondent No.2.
10.2 To quash the re-assessment orders dated
26.12.2016 for the period 2010-11 passed by the
respondent No.3.
10.3 To hold that notification No.17 is not
applicable on the petitioner.
10.4 To hold that re-assessment proceeding is
without jurisdiction as well as based on change of
opinion.
10.5 To hold that no penalty is leviable on the
petitioner.
10.6 To hold that entire purchases cannot be
classified as "telecommunication cables and
accessories" in view of the specific purchase list
filed by the petitioner.
10.7 Any other relief, including the cost of this
petition, as it appears to be fit and appropriate to
this Hon'ble Court."
3. By a common order dated 20.03.2018, the writ petitions were
allowed quashing the re-assessment orders and the penalty imposed.
4. The appellants have filed three writ appeals challenging the
aforesaid order. Writ Appeal No.687 of 2018 arises out of the order
passed in Writ Petition (T) No.79 of 2017, Writ Appeal No.691 of 2018
arises out of the order passed in Writ Petition (T) No.77 of 2017 and
Writ Appeal No.705 of 2018 arises out of the order passed in Writ
Petition (T) No.78 of 2017.
5. Initially, the writ appeals were allowed by the judgment dated
24.10.2019, by which the order passed by the learned Single Judge
was set aside holding that challenge to the assessment /
re-assessment order is not maintainable in view of existence of
alternative remedy of appeal under Section 48 of the VAT Act, and
accordingly, the assessee was directed to move the Appellate
Authority within a period of 45 days. It was observed that on such
appeal being filed by the assessee, the Appellate Authority would
consider and decide the appeal in accordance with law, on its own
merits and without raising objection as to the period of limitation.
6. The assessee had preferred Special Leave Petitions, being
SLP (C) Nos.29127 of 2019, 29180 of 2019 and 29795 of 2019
(registered as Civil Appeal Nos.1993 of 2022, 1994 of 2022 and 1995
of 2022, respectively) before the Hon'ble Supreme Court and by an
order dated 14.03.2022, the Hon'ble Supreme Court had set aside the
order of the Division Bench of this Court dated 24.10.2019 and
relegated the parties before the Division Bench for reconsideration of
the restored / remanded writ appeals on their own merits and in
accordance with law. The parties were directed to appear before this
Court on 18.04.2022.
7. Accordingly, the writ appeals were listed on 18.04.2022 before
this Court. Thereafter, the appeals were heard on 21.06.2022,
04.07.2022 and 05.07.2022.
8. The Hon'ble Supreme Court had observed that the appellants
before the Supreme Court had specifically raised a preliminary
objection before the assessing officer that the proposed action had
become time-barred, and hence, notice under Section 21(7) of the
VAT Act was illegal and unjust being void ab initio. As the issue of
limitation would go to the root of the matter, the same could be taken
as a preliminary objection before the Competent Authority and the
Competent Authority was under an obligation to answer the same one
way or the other, and accordingly, disagreed with the view expressed
by the Division Bench, whereby the appellants were directed to take
recourse to statutory remedy of appeal.
9. The writ petitioner is a Private Limited Company incorporated
under the provisions of the Companies Act, 1956 and engaged in
providing telecommunication services to its customers under a license
granted to it by the Department of Telecommunication. It is pleaded
that under Section 3(2) of the Entry Tax Act, 1976 (for short, 'Entry Tax
Act'), a person is liable for tax only in respect of notified goods i.e.
"telecommunication cables and its accessories" and items like
telecommunication equipments / components are not accessories to
the telecommunication cables, and hence, cannot be subjected to tax
under Section 3(2) of the Entry Tax Act.
10. However, the Commissioner, Commercial Tax issued
Instruction No.12/2013 dated 05.07.2013 to all the Executive
Authorities of the Department to levy entry tax on all such telecom
companies who are purchasing and causing entry of the
telecommunication cables and accessories in the State of
Chhattisgarh.
11. In consequence of the Instruction dated 05.07.2013,
Commercial Tax Officer (Enforcement) prepared a report dated
24.02.2014 for the period 2010-11, 2011-12 and 2012-13 in respect of
the writ petitioner and proposed to levy tax at the rate of 4% treating
the materials as telecommunication cables and accessories. Pursuant
thereto, the assessing authority issued notices dated 20.05.2014 for
the period 2010-11, 2011-12 and 2012-13 under Sections 19(4), 21(6),
22 and 54 read with Rule 30(1) of Chhattisgarh Value Added Tax
Rules, 2006, for short, VAT Rules.
12. It is pleaded that the writ petitioner had raised a preliminary
objection against the notices. However, the Commercial Tax Officer,
Circle- 5, Raipur, Chhattisgarh issued notice in Form-27 mentioning
Section 22(1) of the VAT Act, initiating re-assessment proceeding for
the periods 2010-11, 2011-12 and 2012-13. It is pleaded that Form-27
notice is issued under Section 21(4) of the VAT Act for regular
assessment and for re-assessment, notice in Form-28 is prescribed.
Such notice was objected to by the writ petitioner by filing objection
contending, amongst others, that the same is time barred and that re-
assessment proceedings is without jurisdiction. However, Commercial
Tax Officer, without considering the same in its proper perspective,
passed re-assessment orders dated 26.12.2016 under Section 22(1)
of the VAT Act levying entry tax on non-scheduled goods treating them
as scheduled goods as also imposing penalty.
13. At paragraph 3 of the impugned judgment, the learned Single
Judge formulated a question for consideration as follows:
"The short question of law in the batch of writ petitions
is, whether in absence of any assessment order passed
in the original proceeding under Section 21(7) of the
VAT Act, the assessing officer has power and
jurisdiction to reassess the said deemed reassessment
proceeding under Section 22(1) of the VAT Act and
further the consequential question would be, whether in
that case, the assessing officer is justified in levying
penalty under Section 22(2) of the VAT Act."
14. Mr. Vikram Sharma, learned Deputy Government Advocate for
the appellants submits that the VAT Act provides that assessment
orders may be passed by the assessing officer or the assessment
shall be deemed to have been made, if a registered dealer submits
return along with prescribed documents. He has urged that for the
purpose of taking recourse to Section 22 of the VAT Act, it is not
necessary that there has to be an order of assessment and recourse
can be taken under Section 22 of the VAT Act on the basis of the date
of deemed assessment under Section 21(2) and the view taken by the
learned Single Judge that to invoke jurisdiction under Section 22(1) of
the VAT Act or to initiate proceedings for re-assessment, there must
be an order duly passed by the assessing officer, is not correct.
Relying on Rules 20(d) of the Chhattisgarh Value Added Tax Rules,
2006, for short, the VAT Rules, it is submitted by him that the date of
acknowledgment to be obtained by him for submission of return shall
be deemed to be the date of deemed assessment, as, if the
acknowledgment is not obtained, in terms of Rule 20(e), it would be
deemed that no return had been filed. The writ petitioner had furnished
annual statement for the Assessment Years 2010-11, 2011-12 and
2012-13 on 30.11.2011, 30.11.2012 and 11.12.2013, respectively and
as such, the said dates are to be treated as dates of deemed
assessment, as no other order of assessment was passed.
Accordingly, he submits that the order of the learned Single Judge is
liable to be interfered with. He relies on paragraphs 9 and 14 of the
decision rendered in the case D. Saibaba Vs. Bar Council of India
and Anr, reported in AIR 2003 SC 2502 and in paragraphs 16, 17 and
18 of M.C.D. Vs. Qimat Rai Gupta and Ors ., reported in AIR 2007 SC
2742.
15. Mr. Sumit Nema, learned senior counsel, appearing for the
respondents, relies on the order passed by the learned Single Judge
and drawing attention of the Court to Section 22 of the VAT Act and
more particularly, clauses (a) to (e) therein, contends that there can be
no manner of doubt that there has to be an order or assessment to
invoke Section 22 of the VAT Act. He relies on the decision of the
Hon'ble Supreme Court in the case of Commissioner of Sales Tax,
Madhya Pradesh v. Filter Co. reported in [1997] 107 STC 210 (SC).
16. Mr. Sharma, in reply, contends that in the case of Filter Co.
(supra), there was no deemed assessment as is the case in the
present cases.
17. We have considered the submissions of learned counsel for
the parties and have perused the materials on record.
18. Chapter VI of the VAT Act is under the heading of "Returns,
Assessment, Payment and Recovery of Tax". The writ petitioner is a
registered dealer. Section 19(1)(a)(ii) provides that every registered
dealer shall furnish return in such form, in such manner, for such
period, by such dates and to such authority as may be prescribed.
Section 19(1)(b) provides that every dealer required to furnish returns,
under clause (a), shall furnish a statement in such forms and manner
for such period, by such date and to such authority as may be
prescribed. Section 19(1)(c) provides that every dealer required to
furnish audit report under sub-section (2) of Section 41 shall send such
report of audit along with the statement referred to in clause (b).
Section 19(5)(a) provides that if the Commissioner has reason to
believe that the particulars given by a registered dealer in his return or
returns furnished by him for any period under sub-section (1) or sub-
section (2) are not correct, he may, by giving the dealer an opportunity
of being heard, verify the correctness of such particulars in the return
or returns. Section 19(5)(b) provides that if on such verification, it is
found that the particulars given in the return or returns are not correct
insofar as they relate to the application of the correct rate of tax, the
calculation of tax or interest payable or claim of any deduction and
input tax rebate, he shall by issuing a notice in the prescribed form
require such dealer to make the payment of the additional amount of
tax and/or interest payable by him within the period specified in such
notice.
19. Before proceeding further, it would be appropriate to extract
relevant provisions, namely, Sections 21(1), 21(2), 21(3), 21(4), 21(7)
(i), 21(7)(ii), 21(7)(iii), 22(1), 22(2) and 22(3) of the VAT Act for better
appreciation:
"21. Assessment of tax.-(1) The assessment of every
registered dealer shall be made separately for every
year:
Provided that -
(a) the Commissioner, may, subject to such conditions
and restrictions as may be prescribed, assess the tax
due from any dealer for any part of a year;
(b) a registered dealer who claims a refund of input tax
rebate under the provisions of sub-section (4) of Section
13,-
(i) in his return for any quarter of a year and makes an
application for that purpose, along with such return or
before the date on which the return for the subsequent
quarter becomes, due; or
(ii) in his returns for a year and makes an application for
that purpose before the date on which the return for the
first quarter of the subsequent year becomes due,
the assessment of such dealer for that quarter or year,
as the case may be shall be made in accordance with
the provisions of sub-section (4) within a period of three
months from the date of receipt of the application.
(2) Where a registered dealer other than the registered
dealer referred to in the proviso to sub-section (1) has
furnished,-
(i) all the returns for a year and/or;
(ii) revised return for any quarter or quarters of such
year, in the prescribed manner and within the prescribed
time or before the date on which the return for the first
quarter of the subsequent year becomes due,
(iii) has paid the tax payable according to such returns or
revised returns as also interest payable, if any, and
(iv) has furnished the statement under clause (b) of sub-
section (1) of section 19, within the prescribed time, the
returns furnished or revised returns furnished by such
dealer for that year shall be accepted and his
assessment shall be deemed to have been made for the
purpose of sub-section (1) :
Provided that the assessment under this sub-section of
every such registered dealer who is required to furnish
audit report under sub-section (2) of section 41 shall be
deemed to have been made if such dealer has furnished
the audit report along with the statement referred to in
sub-clause (iv).
(3) Notwithstanding the provisions of sub-section (2), the
commissioner shall select for reassessment a number of
such dealers as he deems fit whose assessment for a
year is deemed to have been made under sub-section
(1) in accordance with the provisions of sub-section (2)
and such selection shall be made within one calendar
year from the said year.
(4) (a) The Commissioner shall serve on a registered
dealer referred to in the proviso to sub-section (1) or in
sub-section (3) or a registered dealer who is not eligible
for assessment under sub-section (2) with a notice in the
prescribed form appointing a place and day and directing
him-
(i) to appear in person or by an agent entitled to appear
in accordance with the provisions of Section 24; or
(ii) to produce evidence or have it produced in support of
the returns; or
(iii) to produce or cause to be produced accounts,
registers; cash memoranda or other documents relating
to his business;
(b) The Commissioner, after hearing the registered
dealer or his agent and examining the evidence
produced in compliance with the requirements of sub-
clause (ii) or sub-clause (iii) of clause (a) and such
further evidence as he may require, shall assess or re-
assess him to tax.
xxx xxx xxx
xxx xxx xxx
(7) (i) The assessment in respect of a registered
dealer referred to in clause (a) of sub-section (4)
shall be made within a period of two calendar years
from the end of the period for which the assessment
is to be made;
(ii) The assessment in respect of a dealer referred to
in clause (b) of sub-section (6) for any period shall
be made within a period of two calendar years from
the end of such period; and
(iii) In respect of a dealer, under clause (a) of sub-
section (6) shall be made within a period of one
calendar year from the commencement of
proceedings under the said sub-section :
Provided that-
(a) where a fresh assessment has to be made to
give effect to any finding or direction contained in
any order under Sections 48, 49 and 55 or to any
order or judgment of the Civil Court, High Court,
Supreme Court; such assessment shall be made
within one calendar year :-
(i) from the date of the order under Sections 48, 49
and 55 containing any finding or direction, and
(ii) from the date of initiation of assessment/re-
assessment proceeding in pursuance to the order,
or judgment of Civil Court, High Court or Supreme
Court, and
(b) where an order of ex-parte assessment of a
registered dealer referred to in clause (a) of sub-
section (4) is set-aside and case reopened under
Section 36 for making a fresh assessment, such
fresh assessment shall be made within a period of
six calendar months from the date of setting aside
the ex-parte order of assessment or within the
period laid down in clause (i) whichever is later; and
(c) nothing contained in this sub-section shall apply
to proceedings initiated under Section 22 or any
proceeding other than assessment or re-
assessment of tax that may be instituted under any
other provisions of this Act.
xxx xxx xxx
22. Assessment/reassessment of tax in certain
circumstances.-(1) Where an assessment or re-
assessment of a dealer has been made under this
Act or the Act repealed by this Act and for any
reason any sale or purchase of goods liable to tax
under this Act or the Act repealed by this Act during
any period,-
(a) has been under assessed or has escaped
assessment; or
(b) has been assessed at a lower rate; or
(c) any wrong deduction has been made while
making the assessment; or
(d) a rebate of input tax has incorrectly been allowed
while making the assessment; or
(e) is rendered erroneous and prejudicial to the
interest of revenue consequent to or in the light of
any judgment or order of any Court or Tribunal,
which has become final, the Commissioner may at
any time within a period of five calendar years from
the date of order of assessment, or from the date of
judgment or order of any Court or Tribunal proceed
in such manner as may be prescribed, to assess or
re-assess, as the case may be the tax payable by
such dealer after making such enquiry as he
considers necessary and assess or re-assess to tax.
(2) The Commissioner shall, where the omission
leading to assessment or re-assessment made
under sub-section (1) is attributable to the dealer, in
addition to interest at the rate specified in sub-
clause (iii) of clause (a) of sub-section (4) of Section
19, impose upon him a penalty not exceeding twice
the amount of tax so assessed or re-assessed but
shall not less than one and half times of the amount
of tax assessed.
(3) The assessment or re-assessment under sub-
section (1) shall be made within a period of two
calendar years from the date of commencement of
the proceedings under the said sub-section."
20. Section 21(1) of the VAT Act provides that the assessment of
every registered dealer shall be made separately for every year.
Section 21(2) provides that where a registered dealer other than the
registered dealer referred to in the proviso to sub-section (1) has
furnished - (i) all the returns for a year; and / or (ii) revised return for
any quarter or quarters of such year, in the prescribed manner and
within the prescribed time or before the date on which the return for the
first quarter of the subsequent year becomes due; (iii) has paid the tax
payable according to such returns or revised returns as also interest
payable, if any; and (iv) has furnished the statement under clause (b)
of sub-section (1) of Section 19, within the prescribed time, the returns
furnished or revised returns furnished by such dealer for that year shall
be accepted and his assessment shall be deemed to have been made
for the purpose of sub-section (1). The proviso therein lays down that
the assessment under sub-section (1) of Section 21 of every such
registered dealer who is required to furnish audit report under sub-
section (2) of Section 41 shall be deemed to have been made if such
dealer has furnished the audit report along with the statement referred
to in sub-clause (iv).
21. Section 21(3) of the VAT Act provides that notwithstanding the
provisions contained in sub-section (2), the Commissioner shall select
for re-assessment a number of such dealers as he deems fit whose
assessment for a year is deemed to have been made under sub-
section (1) in accordance with the provisions of sub-section (2) and
such selection shall be made within one calendar year from the said
year. Section 21(4)(a) provides that the Commissioner shall serve on a
registered dealer referred to in the proviso to sub-section (1) or in sub-
section (3) or a registered dealer who is not eligible for assessment
under sub-section (2) with a notice in the prescribed form appointing a
place and day and directing him - (i) to appear in person or by an
agent entitled to appear in accordance with the provisions of Section
24; or (ii) to produce evidence or have it produced in support of the
returns; or (iii) to produce or cause to be produced accounts, registers,
cash memoranda or other documents relating to his business. Section
21(7)(i) provides that the assessment in respect of a registered dealer
referred to in clause (a) of sub-section (4) shall be made within a
period of two calendar years from the end of the period for which the
assessment is to be made.
22. Though notice dated 11.02.2016 under Section 21(4) of the
VAT Act was issued to the writ petitioner, also indicating Section 22(1)
in the said notice, no order of assessment was passed in terms of
Section 21(7) of the VAT Act and admittedly, there was deemed
assessment in respect of Assessment Years 2010-11, 2011-12 and
2012-13. Assessment proceeding under Section 21(7) of the VAT Act
is to be completed within a period of two calendar years from the end
of the period for which the assessment is to be made. It is also not in
dispute that re-assessment order was passed in terms of Section 22(1)
of the VAT Act.
23. Section 22(1) of the VAT Act, amongst others, provides that
where the assessment or re-assessment of a dealer has been made
under the VAT Act and for any reason any sale or purchase of goods
liable to be taxed under the VAT Act or the Act repealed by this Act
during any period, (a) has been under assessed or has escaped
assessment, or (b) has been assessed at a lower rate or (c) any wrong
deduction has been made while making the assessment, or (d) a
rebate of input tax has incorrectly been allowed while making the
assessment, or (e) is rendered erroneous and prejudicial to the interest
of revenue consequent to or in the light of any judgment or order of
any Court or tribunal which has become final, the Commissioner may
at any time within a period of five calendar years from the date of order
of assessment or from the date of judgment or order of any court or
tribunal proceed in such manner as may be prescribed, to assess or
re-assess, as the case may be the tax payable by such dealer after
making such enquiry as he considers necessary, and assess or re-
assess to tax.
24. As the word "order" appearing in Section 22(1) of the VAT Act
is not defined in the VAT Act, the learned Single Judge took the aid of
definition of "order" in Section 2(14) of the Civil Procedure Code, 1908
as also dictionary meaning of the word "order" in Black's Law
Dictionary (Eighth Edition) to come to the conclusion that the words
"order of assessment" employed in Section 22(1) of the VAT Act
clearly denotes that there must be a formal adjudication by the
assessing officer after taking into account the return and statutory
compliances and the documents furnished by the petitioner in
contradistinction to Section 21(2) which is a deemed assessment.
25. It was held by the learned Single Judge that the use of the
words "from the date of order of assessment" appearing in Section
22(1) of the VAT Act clearly indicates that the original assessment
order has to be in existence prior to exercising the power of re-
assessment. At paragraph 34 of the judgment under assailment, it was
observed as follows :
"34. Thus, in sum and substance, in order to invoke
jurisdiction under Section 22(1) of the VAT Act or to
initiate proceedings for reassessment there must be an
order of assessment duly passed by the assessing officer
and it must be in existence as a condition precedent to
invoke Section 22(1) and the limitation prescribed is five
calendar years from the date of commencement of such
proceedings, whereas the deemed assessment order
under Section 21(2) is only reassessable under Section
21(3) of the VAT Act within one calendar year from such
year. In case there is no order of assessment passed
under Section 21(7) of the VAT Act, it cannot be subject
to reassessment proceeding under Section 22(1) of the
VAT Act."
26. Learned Single Judge at paragraphs 36 and 37 observed as
follows :
"36. Reverting to the facts of the present case, after
having noticed the judgment of the Supreme Court in
Filter Co.'s case (supra), it is quite vivid that in the
instant case, the matter was heard by the assessing
officer up to 18-2-2015 after having issued notices on
12-5-2014, but no order of assessment was passed
under Section 21(7) of the VAT Act, though original
assessment proceedings were initiated by issuance of
notice on 12-5-2014 and matter was heard time to time
by the assessing officer resulting into deemed
assessment by virtue of the provisions contained in
Section 21(2) of the VAT Act which was reassessable
under Section 21(3) of the VAT Act within a period of
one calendar year at the instance of the Commissioner
on selection being made by him. Thus, the jurisdictional
fact and condition precedent for invoking Section 22(1)
of the VAT Act i.e. the order of assessment was not in
existence on the date of issuing notice for reassessment
under Section 22(1) of the VAT Act. Therefore, the
learned assessing officer was jurisdiction-less to initiate
proceeding for reassessment under Section 22(1) of the
VAT Act and the order of reassessment ultimately
passed is without jurisdiction and without authority of
law and dehors the provisions contained in Section
22(1), as such, it deserves to be quashed.
37. This leads me to the next question as to whether
the penalty imposed invoking Section 22(2) of the VAT
Act is sustainable. Section 22(2) of the VAT Act provides
that the commissioner shall, where the omission leading
to assessment or reassessment made under sub-section
(1) is attributable to the dealer, impose upon him a
penalty not exceeding twice the amount of tax so
assessed or re-assessed but shall not be less than the
amount of tax assessed. The penalty is imposable
leading to reassessment where the omission leading to
assessment or reassessment under sub-section (1) is
attributable to the dealer. In the instant case, it has
already been held that there is no order of assessment
as the assessing officer did not pass any assessment
order and thus, there is failure on the part of the
assessing officer to pass the original assessment order.
For the reason that the order of reassessment is to
beheld without jurisdiction and without authority of law,
therefore, the order imposing penalty passed upon
reassessment cannot stand and accordingly, it deserves
to be quashed."
27. In Filter Co. (Supra), pursuant to an opinion sought under
Section 42-B of the MP General Sales Tax Act, 1958, opinion was
given by the Commissioner that "felt" submitted by the assessee, being
a woolen fabric, was exempt from tax under the State Act and thus, for
Assessment Years 1971-72 to 1977-78, the assessee was not
assessed to sales tax. On the basis of the decision in Union of India
vs. Gujarat Woollen Felt Mills, reported in (1977) 2 SCC 870,
wherein it was held by the Hon'ble Supreme Court that "felt"
manufactured by the assessee was liable to excise duty, the opinion
given earlier by the Commissioner was cancelled and the assessment
proceedings for the Assessment Years 1971-72 to 1977-78 were
revived under the provisions of Section 19(1) of the State Act and
assessment of sales tax was made. In that context, the Hon'ble
Supreme Court at paragraphs 3 and 4 observed as follows:
"3. The notices and subsequent proceedings under
Section 19 are not on the record before us, but it is
clear from what has been stated by the Board and by
the High Court that the assessments that are under
challenge were made upon the strength of the
provisions of Section 19 of the State Act. The relevant
portion of Section 19 reads thus:
"Where an assessment has been made under this Act
or any Act repealed by Section 52 and if for any
reason any sale or purchase of goods chargeable to
tax under this Act or any Act repealed by Section 52
during any period has been under assessed or has
escaped assessment or assessed at a lower rate or
any deduction has been wrongly made therefrom, the
Commissioner may, at any time within five calendar
years from the date of order of assessment, after
giving the dealer a reasonable opportunity of being
heard and after making such enquiry as he considers
necessary, proceed in such manner as may be
prescribed to reassess...."
4. It is crystal clear therefrom that it applies only if an
assessment has already been made and there has
been under-assessment or escaped assessment
therein. In a case where there has been no
assessment, as in the case before us for the
assessment years in question, the provisions of
Section 19 do not apply and cannot be invoked."
28. Mr. Vikram Sharma sought to distinguish the aforesaid
judgment contending that in the aforesaid case, question of deemed
assessment has not fallen for consideration and therefore, the
aforesaid judgment is not applicable to the facts and circumstances of
the case. The submission is without any merit. The question is what is
the meaning to be ascribed to the "date of order of assessment" and
"assessment or re-assessment of a dealer has been made" as
appearing in Section 22 of the VAT Act. We are in accord with the
view taken by the learned Single Judge. The provisions as noticed
above make it abundantly clear that an assessment or re-assessment
of a dealer had to be made by way of an order before exercise of
powers under Section 22 of the VAT Act can be made, that too, within
the period of five calendar years from the date of order of assessment.
It is only in the event of passing an order, period of five calendar years,
which is the limitation period, can be reckoned from the date of order
of assessment. Invocation of Section 22 is permissible only when
assessment of a dealer (a) has been under assessed or has escaped
assessment or (b) has been assessed at a lower rate or (c) any wrong
deduction has been made while making the assessment or (d) a
rebate of input tax has incorrectly been allowed while making the
assessment or (e) is rendered erroneous and prejudicial to the interest
of revenue consequent to or in the light of any judgment or order of
any Court or Tribunal, which has become final. The aforesaid
conditions precedent cannot be countenanced in absence of an order
of assessment in writing and in that view of the matter, in respect of
deemed assessment, recourse cannot be taken under Section 22 of
the VAT Act.
29. Rule 20 under Chapter VI of VAT Rules, 2006 relates to
"Returns". Rule 20(2)(d), on which reliance is placed by Mr. Sharma
was inserted by notification dated 02.06.2011. Subsequently, by
notification dated 21.10.2011, the words "in two copies" after the
words "form 17-A" in Rule 20(2)(d) were inserted. Rule 20(2)(d)
provides that after submission of electronic return, form 17-A in two
copies be submitted along with copy of the challan of the tax
deposited within thirty days in the relevant circle and acknowledgment
has to be obtained. Rule 20(2)(e) provides that if the acknowledgment
prescribed under clause (d) is not obtained, then it will be deemed that
no return has been filed. Argument of Mr. Sharma that the date of
acknowledgment of submission of electronic return is the date of the
order of deemed assessment, and therefore, it is incorrect to say that
there is no date of order of assessment, is misconceived. The
acknowledgment obtained for submission of return cannot be
construed to mean that the acknowledgment had resulted in an order
of assessment.
30. In D. Saibaba (supra), in the context of commencement of the
period of limitation for filing review petition, expression "date of that
order" as occurring in Section 48AA of the Advocates Act, 1961, the
Hon'ble Supreme Court observed that the same has to be construed
as meaning the date of communication or knowledge of the order to
the review petitioner and that the knowledge, either actual or
constructive, of the party affected by such a decision, is an essential
element which must be satisfied before the decision can be brought
into force. The above decision has no application in the facts of the
case.
31. In MCD (supra), the Hon'ble Supreme Court had occasion to
consider what is the meaning of the word "made". It was observed that
the meaning of the word would depend upon its text and context as
also the purport and object it seeks to achieve. It was also observed
that if the intention or design of the statutory provision was to protect
the interest of the person adversely affected, by providing a remedy
against the order or decision any period of limitation prescribed with
reference to invoking such remedy shall be read as commencing from
the date of communication of the order. But if it is a limitation for a
competent authority to make an order the date of exercise of that
power and in the case of exercise of suo moto power over the
subordinate authorities' orders, the date on which such power was
exercised by making an order are the relevant dates for determining
the limitation. The ratio of this case also does not have any application
to the facts of the present case.
32. In view of the above discussion, we find no merit in these
appeals and accordingly, the writ appeals are dismissed. No cost.
Sd/- Sd/-
(Arup Kumar Goswami) (Parth Prateem Sahu)
Chief Justice Judge
Anu
