Chattisgarh High Court
M/S Parle Agro Private Limited vs State Of Chhattisgarh on 15 December, 2022
Author: P. Sam Koshy
Bench: P. Sam Koshy
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NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
Writ Petition (T) No.20 of 2021
1. M/s Parle Agro Private Limited A Private Limited Company, Registered And
Incorporated Under Indian Companies Act, 1956 Having Its Office At Opp.
Shiv Dharam Kanta, Behind Durga Fuel (Indian Oil Pump), Gondwara
Ring Road No. 2, Raipur, Chhattisgarh- 493221 Through Its Authorised
Signatory Mr. Pritam Pandhrinath Kulapkar (General Manager- Taxation).
---- Petitioner
Versus
1. State of Chhattisgarh Through The Secretary, Department of Commercial
Tax, Government of Chhattisgarh, Mantralaya, Mahanadi Bhawan, Nawa
Raipur, Atal Nagar, Naya Raipur, District Raipur (Chhattisgarh).
2. The Commissioner of Commercial Tax Chhattisgarh, Raipur, District
Raipur (Chhattisgarh).
3. The Assistant Commissioner of Commercial Tax Division-2 Raipur, District
Raipur (Chhattisgarh).
---- Respondents
For Petitioner : Shri H.G. Dharmadhikari, Shri Ashish Surana and Ms. Lalita S. Phadke, Advocates.
For State : Shri Rahul Jha, Govt. Advocate and Ms. Akanksha Jain, Dy. Govt. Advocate.
Hon'ble Shri Justice P. Sam Koshy Order on Board 15.12.2022
1. Challenge in the present writ petition is to the order Annexure P/1 dated 28.12.2020 passed by the Respondent No.3, the Assistant Commissioner, Commercial Tax.
2. The issue involved in the present writ petition is as to whether the respondent authorities would have the power to reopen the assessment made without there being an assessment order only accepting the deemed assessment made by the assessee and treating it to be the assessment order.
3. The issue involved is no longer res integra so far as this court is concerned. A series of writ petitions have already been allowed by the Single Bench of this court and which has further been confirmed by the Division Bench as well.
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4. The challenge in the present writ petition is to the order under Section 22 of the Chhattisgarh VAT Act (in short, the Act) whereby the respondent authorities have reopened the deemed assessment submitted by the petitioner. It is the further contention of the petitioner that the reopening of an assessment is permissible only in the event of there being an assessment order passed by the respondents as is otherwise required under Section 21(1) of the Act, which in the instant case has not been passed and the respondent authorities have proceeded to reopen the account based upon the deemed assessment submitted by the petitioner.
5. Learned counsel for the petitioner referred to two of the recent decisions of the Division Bench of this Court on the same subject matter i.e. one which was decided in WA No. 687/2018 (State of Chhattisgarh & others v. M/s. Tata Teleservices Limited) and other connected appeals decided on 18.08.2022. These appeal by the State were against the order passed by the Single Bench in WPT No.79/2017 (M/s. Tata Teleservices Limited v. State of Chhattisgarh & others) decided on 20.03.2018. In the writ petition the Writ Court in an identical set of facts had held the order of reassessment to be bad when the order of assessment itself was not issued by the respondents. This was subjected to challenge before the Division Bench and the Division Bench affirming the same rejected the three appeals filed by the State. The Division Bench in its order has in paragraphs No. 23 to 26, 28 & 29 has held as under:
"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 -3- 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 reassess 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 reassessment. 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.-4-
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 22 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.
28. .................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 -5- submission of return cannot be construed to mean that the acknowledgment had resulted in an order of assessment."
6. Subsequently, there was another similar matter which came up for consideration before the Division Bench in TAXC No.74/2022 in the case of "M/s. Iron Junction Rajbandha Maidan, Raipur Vs. Commissioner of Commercial Tax" wherein keeping in view the decision rendered in the case of "M/s. Tata Teleservices Limited" (supra) the Division Bench had disposed of the Tax case in terms of the order passed in "M/s. Tata Teleservices Limited" (supra).
7. So far as the factual aspect is concerned, whether there has been an assessment order as such passed under Section 21(1) of the Act by the authorities, it is not disputed by the State. However, the State counsel only tried to justify their stand as such an assessment order is not required deemed assessment submitted by the petitioner under Section 21(1) of the Act is good enough for reopening of assessment invoking Section 22 and deemed assessment itself has to be considered and treated as an order of assessment.
8. The State counsel further submits that the judgment of the Division Bench in case of State of Chhattisgarh & Ors. Vs. M/s TATA Teleservices Limited & Others has already been challenged by the State before the Supreme Court where the matter is yet to come up for hearing.
9. Given the said submission made by the counsel for the parties, what is also required to be taken note of is the fact that this very arguments raised by the State counsel are one which have been dealt with extensively by the Division Bench while deciding the matter in TATA Teliservies (Supra). This have further been followed by the Division Bench again in TAXC No. 74/2022 in case of M/s Iron Junction, Rajbandha Maidan, Raipur (Supra) reiterating the same stand earlier taken by the Division Bench. It has been emphatically held that unless there is a specific order of assessment under -6- Section 21(1) passed by the authorities concerned, there cannot be reopening of an assessment which has otherwise been made under Section 21(2) of the Act.
10. In view of the aforesaid judicial precedent that we have on the subject matter by the Division Bench of this court as also by a bunch of writ petitions decided by the Single Bench also, this court is inclined to take the same view and thereby allow the present writ petition as well. The impugned order Annexure P/1 dated 28.12.2020 passed by the respondent No.3 to the aforesaid extent stands quashed/set aside.
11. Accordingly, the writ petition stands allowed and disposed of.
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(P. Sam Koshy) Judge inder