Tripura High Court
Ruchi Soya Industries Ltd vs The State Of Tripura And Ors on 9 September, 2020
Author: S.G.Chattopadhyay
Bench: S.Talapatra, S.G.Chattopadhyay
Page 1 of 25
HIGH COURT OF TRIPURA
AGARTALA
CRP No. 28/2017
BEFORE
HON'BLE MR.JUSTICE S.TALAPATRA
HON'BLE MR.JUSTICE S.G.CHATTOPADHYAY
Ruchi Soya Industries Ltd. .............Appellant.
Versus
The State of Tripura and Ors. .....Respondent(s).
For the Appellant(s) :Mr. Biplabendu Roy, Adv.
For the Respondent(s) :Mr. A.Nandi, Adv.
Date of hearing :13.03.2020
Date of Judgment and order :09.09.2020
Whether fit for reporting : Yes No
JUDGMENT
[Per S.G.Chattopadhyay, J] This Civil Revision Petition has been filed under Section 72(2) of the Tripura Value Added Tax Act, 2004(in short, the TVAT Act, 2004) against the order dated 28.02.2017 passed by the Commissioner of Taxes as Revisional Authority in Revision Case No 18 of 2016 whereby the assessment order dated 29.09.2016 made by the Superintendent of Taxes, charge VIII, Agartala for the period from 2011-12 to 2014-15 was upheld.
CRP 28/2017 Page 2 of 25 [2] Brief facts of the case are as under:
(i) Revision petitioner namely, Ruchi Soya Industries is a private limited company incorporated under the provisions of the Companies Act, 1956 which is engaged in the business of edible oil and soyabori etc. It enjoys registration under the T. VAT Act, 2004 and the Central Sales Tax Act, 1956. The petitioner has a branch office at Dhaleswar Road no 16 at Agartala in West Tripura District for carrying out its business within the state of Tripura.
(ii) The Superintendent of Taxes, Charge VIII, Agartala being the Assessing Authority vide Assessment Order dated 29.09.2016 imposed penalty on the Revision petitioner in terms of Section 53(3) for non submission of audited accounts for the years 2011-12 to 2014-15. The order dated 29.09.2016 of the Assessing Authority reads as follows:
"Since the dealer has tried to conceal the actual taxable turnover by way of suppressing the actual import of taxable goods with a view to evading tax, I hold the dealer guilty of offence under this Act and impose penalty @ 15% of the concealed tax amount besides charge interest as per CRP 28/2017 Page 3 of 25 provisions of the TVAT Act, 2004.The dealer has not submitted audited accounts for the years 2011-12 to 2014-15 as required under Section 53(1) and (2) of the TVAT Act, 2004 which attract penal actions under Section 53(3) of the said Act for the aforenoted year and also impose penalty @0.1% on the turn over determined for the years 2011-12 to 2014-15 and thus complete the assessment in the computation noted below:
COMPUTATION (in Rs.) 2011-12 4% 5% 12.5% 13.5% TOR 4,0254904.00 45,19,87,875.00 4,15,781.00 64,01,038.00 TOD 4,02,90,160.00 45,20,40,160.00 4,25,290.00 64,30,270.00 Tax payable 16,11,606.40 2,26,02,008.00 53,161.25 8,68,086.45 Total tax payable 2,51,34,862.00 Less : VAT Paid 2,51,25,703.00 9,159.00 Interest 7,419.00 Addl. Penalty@15% as 1,374.00 discussed Add. Penalty @0.1% and the 4,99,186.00 TOD U/S 53(3) of the TVAT Act,2004 Net due 5,17,138.00 2012-13 2013-14 5% 13.5% 5% 13.5% 14.5% TOR 47,78,73,245.00 1,18,76,107.00 44,36,45,341.00 80,37,580.00 52,41,149.00 TOD 47,79,26,240.00 1,19,17,490.00 44,48,04,112.00 80,51,220.00 52,55,160.00 Tax payable 2,38,96,312.00 16,08,861.00 2,22,40,206.00 10,86,915.00 7,61,998.00 Total tax payable 2,55,05,173.00 2,40,89,119.00 Less : VAT Paid 2,54,96,937.00 2,40,27,307.00 8236.00 61812.00 Add. Interest 5189.00 27,815.00 Addl.Penalty@15 1235.00 9272.00 % as discussed Add. Penalty for 14,00.00 NIL late submission of returns as discussed Add. Penalty 4,89,844.00 4,58,110.00 @0.1% and the TOD U/S 53(3) of the TVAT Act,2004 Net due 5,05,904.00 5,57,009.00 CRP 28/2017 Page 4 of 25 2014-15 5% 14.5% TOR 52,11,30,604.00 2,25,78,683.00 TOD 52,12,19,117.00 2,26,05,160.00 Tax payable 2,60,60,956.00 32,77,748.00 Total tax payable 2,93,38,704.00 Less : VAT Paid 2,93,30,439.00 Balance due 8265.00 Add. Interest 2232.00 Addl. Penalty@15% 1240.00 as discussed Add. Penalty @0.1% and the TOD U/S 53(3) of the 5,43,824.00 TVAT Act,2004 Net due 5,55,561.00
(iii) Aggrieved by the penalty, so imposed by the Assessing Authority, the revision petitioner put to challenge the assessment order dated 29.09.2016 before the Commissioner of Taxes[the Revisional Authority] under Section 70(2) of the TVAT Act,2004 alleging, inter alia, as under:
(a) The Assessing officer imposed tax, interest and penalty on the Revision petitioner by enhancing his gross turnover against the law.
(b) The reply of the Revision Petitioner in response to the show cause notice issued by the Assessing Authority was not duly considered by the Assessing Office.
(c) The Assessing Officer did not consider the fact that the Revision Petitioner never defaulted in payment of tax.CRP 28/2017 Page 5 of 25
(iv)His petition filed under Section 70(2) of the TVAT Act, 2004 was registered as Revision Case no 18 of 2016 before the Commissioner of Taxes [Revisional Authority].
The said Revisional Authority after hearing the parties decided the matter vide order dated 28.02.2017, which is as under:
Shri Ajit Kr.Jha, the petitioner is present. Sri A.Barman, Superintendent of Taxes, HQ, is also present and presented the case records.
.............................................
Heard Sri Jha and perused the case records. Section 53(3) of the TVAT Act,2004 provides "If any dealer liable to get his accounts audited under sub-section (1) fails to get his accounts audited and furnish a true copy of the audit report within the time specified in sub-section(2), the Commissioner shall, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, a sum by way of penalty equal to 0.1% of the turnover as he may determine to the best of his judgment in his case in respect of the said period". Imposition of penalty equal to 0.1% is mandatory in case of non-
submission of the audit report within the time specified in Section 53(2) of the TVAT Act,2004 and it has been accepted by the petitioner that he did not submit the audit report within the time CRP 28/2017 Page 6 of 25 specified in sub section(2) of Section 53 of TVAT Act. The Superintendent of Taxes, Charge- VIII, Agartala has rightly imposed penalty for non-submission of audit report in due time. The order dated 29.09.2016 passed by the Superintendent of Taxes, Charge- VIII, Agartala for the period 2011- 12, 2012-13, 2013-14 and 2014- 15 is upheld.
(v) Having been dissatisfied with the order dated 28.2.2017 in Revision Case no.18 of 2017, the present Revision petitioner has challenged the order in the present Revision Petition before us.
[3] We have heard Mr. B. Roy, learned advocate appearing for the Revision Petitioner as well as Mr. A.Nandi, learned advocate appearing on behalf of the State respondents.
[4] The main contention raised on behalf of the revision petitioner is that the impugned assessment order dated 29.09.2016 passed by the Superintendent of Taxes(Assessing Officer) Agartala for the period from 2011-12 to 2014-15 was ultra vires the provisions of Section 33 of the TVAT Act, 2004 because such assessment was absolutely time barred and order dated 28.02.2017 passed by the Commissioner of Taxes CRP 28/2017 Page 7 of 25 (Revisional Authority) in Revision Case No.18 of 2017 upholding such assessment order was bad in law. It is next contended that the petitioner never concealed its taxable turnover for evading tax and as such imposition of penalty @15% of the concealed tax amount was wholly without jurisdiction. Further contention on behalf of the revision petitioner is that penalty equal to 0.1% of the turn over which has been imposed on him in terms of Section 53(3) of the TVAT Act is not tenable in the eye of law because such penalty has been imposed without affording reasonable opportunity of hearing to him.
[5] Mr. A.Nandi, learned advocate representing the State respondents on the other hand has contended that the Revision Petition is devoid of merit because admittedly the Revision petitioner did not submit the audited accounts in time in terms of Section 53(1) and (2) of the TVAT Act, 2004 resulting in loss of revenue of the State for which the assessing authority rightly imposed penalty on the Revision petitioner in exercise of its statutory power. It is argued by Mr. Nandi that order dated 28.02.2017 passed by the Revisional CRP 28/2017 Page 8 of 25 Authority in Rev. Case No.18 of 2017, therefore, does not call for any interference.
[6] The moot questions arising for our consideration in this Civil Revision are as follows:
(i)whether the impugned assessment order dated 29.09.2016 passed by the Superintendent of Taxes(Assessing Officer) Agartala for the period from 2011-12 to 2014-15 is ultra vires the provisions of Section 33 of the TVAT Act, 2004 being hit by limitation.
(ii)whether the imposition of penalty@15% on the petitioner on the ground of evasion of tax by way of concealment of taxable turnover was made without affording reasonable opportunity of hearing to the petitioner.
(iii)whether the penalty equal to 0.1% of the turnover was imposed on the assessee in terms of Section 53(3) of the TVAT Act after affording reasonable opportunity of hearing to the assessee.
(iv)whether the assessee can be saddled with the liability of non submission of the audited CRP 28/2017 Page 9 of 25 accounts of his company in absence of prescribed form in terms of Section 53(1) of TVAT Act; and
(v)whether order dated 28.02.2017 passed by the Commissioner of Taxes (Revisional Authority) in Revision Case No.18 of 2017 upholding the assessment order dated 29.09.2016 is bad in law.
The legal provisions:
[7] To appreciate the arguments raised by the learned counsel representing the parties, it would be pertinent to refer to the relevant provisions of the Tripura Value Added Tax Act, 2004.
[8] Section 25 of the Act deals with return defaults which reads as follows:
25. Return defaults:-
(1) If a dealer required to file return under sub-section (1) or sub-section (2) of section 24 -
(a) fails without sufficient cause to pay the amount of tax due as per the return for any tax period ; or
(b) furnishes a revised return under sub-section (3) of section 24 showing a higher amount of tax to be due than was shown by him in the original return; or
(c) fails to furnish return; such dealer shall be liable to pay interest in respect of-CRP 28/2017 Page 10 of 25
(i) the tax payable by him according to the return, or
(ii) the difference of the amount of tax according to the revised return; or
(iii) the tax payable for the period for which he has failed to furnish return; at the rate of one and half percent per month from the date the tax payable had become due to the date of its payment or to the date of order of assessment, whichever is earlier.
(2) 'Month' shall mean thirty days and the interest payable in respect of a period of less than one month shall be treated as a full month.
(3) If a registered dealer, without sufficient cause, fails to pay the amount of tax due and interest along with return or revised return in accordance with the provisions of sub-
section (1), the Commissioner may, after giving the dealer reasonable opportunity of being heard, 30 direct him to pay in addition to the tax and interest payable by him a penalty, not exceeding one and half times of the tax due but which shall not be less than 10% of that amount. (4) If a registered dealer or any other dealer required to furnish return under sub-section (2) of section 24 without any sufficient cause -
(a) fails to comply with the requirements of the notice issued under sub-section (2) of section ; or
(b) fails to furnish any return by the prescribed date as required under sub-section (2) of section 24; or
(c) being required to furnish revised return, fails to furnish the revised return by the date prescribed under sub-section (3) of section 24; or
(d) having paid the tax payable according to a return in time, fails to furnish along with the return proof of payment made in accordance with sub-section (4) of section 24; the Commissioner may, after giving the dealer reasonable opportunity of being heard, direct him to pay in addition to any tax, interest and penalty under sub-section (3) payable or paid by him, a penalty of a sum of rupees one hundred per day of default subject to a maximum of rupees ten thousand. CRP 28/2017 Page 11 of 25 (5) Any penalty imposed under this section shall be without prejudice to any prosecution for any offence under this Act.
(6) For the purposes of this Act, any return signed by a person who is not authorized under sub-section (5) of section 24 shall be treated as if no return has been filed. [9] Section 31 deals with audit assessment which is as follows:
31. Audit assessment:-
(1) Where
(a) a registered dealer has failed to furnish any return under sub-section (1) of section 25 in respect of any period; or
(b) a registered dealer is selected for audit assessment by the Commissioner on the basis of any criteria or on random basis; or
(c) the Commissioner is not satisfied with the correctness of any return filed under section 24, or bonafides of any claim of exemption, deduction, concession, input tax credit or genuineness of any declaration, evidence furnished by a registered dealer in support thereof; or
(d) the Commissioner has reasons to believe that detailed scrutiny of the case is necessary, the Commissioner may, notwithstanding the fact that the dealer may already have been provisionally assessed under section 30, serve on such dealer in the prescribed manner a notice requiring him to appear on a date and place specified therein, which may be in the business premises or at a place specified in the notice, to either attend and 33 produce or cause to be produced the books of account and all evidence on which the dealer relies in support of his returns including tax invoice, if any, or to produce such evidence as specified in the notice.
(2) The dealer shall provide all cooperation and assistance to the Commissioner to conduct the proceedings under this section at his business premises. CRP 28/2017 Page 12 of 25 (3) If proceedings under this section are to be conducted at the business premises of the dealer and it is found that the dealer or his authorized representative is not available or not functioning from such premises, the Commissioner shall assess to the best of his judgment the amount of tax due from him.
(4) If the Commissioner, after considering all the evidences produced in course of the proceedings or collected by him, is satisfied that any dealer -
(a) has not furnished return in respect of any period by the prescribed date; or
(b) has furnished incomplete and incorrect return for any period; or
(c) has failed to comply with any notice under sub-section (1) or sub-section (3); or
(d) has failed to maintain accounts in accordance with the provisions of this Act or has not regularly followed any method of accounting; the Commissioner shall assess to the best of his judgment the amount of tax due from such dealer.
(5) If the Commissioner is satisfied that the dealer, in order to evade or avoid payment of tax -
(a) has failed to furnish without reasonable cause, returns in respect of any period by the prescribed date; or
(b) has furnished incomplete and incorrect returns for any period; or
(c) has availed himself of tax credit to which he is not entitled to; or
(d) has followed such method of accounting which does not enable the Commissioner to assess the tax due from him, he shall, after giving the dealer reasonable opportunity of being heard, direct him to pay, in addition to tax and interest payable by 34 him, a penalty not exceeding one and half times of the tax due but which shall not be less than 10% of that amount.
CRP 28/2017 Page 13 of 25 [10] Section 33 provides limitation bar for assessment of tax which reads as follows:
33. No assessment after five years:-
(1) No assessment under section 31 and 32 shall be made after the expiry of five years from the end of the tax period to which the assessment relates;
Provided that in case of offence under this Act for which proceeding for prosecution has been initiated, the limitation as specified in this sub-section shall not apply. (2)Any assessment made or penalty imposed under this Chapter shall be without prejudice to prosecution for any offence under this Act.
[11] Section 35 provides for exclusion of time period in computing the period of limitation for assessment which is as follows:
35. Exclusion of time period for assessment:-In computing the period of limitation specified for assessment or reassessment, as the case may be, the time during which any assessment or reassessment proceeding remained stayed under the order of a competent Court shall be excluded.
[12] Section 53 of the Act deals with audit of accounts and provides for penalty for non submission of audited accounts which reads as follows:
53. Audit of accounts :-
(1) Where in any particular year, the gross turnover of a dealer exceeds forty lacs rupees or such other amount as the Commissioner, may, by notification in the official Gazette specify, then such dealer shall get his accounts, in respect of that year audited by an accountant within six months from the end of that year and obtain a report of such audit in the prescribed form duly signed and verified CRP 28/2017 Page 14 of 25 by such accountant and setting forth such particulars as may be prescribed.
(2) A true copy of such report shall be furnished by such dealer to the Commissioner by the end of the month after expiry of the period of six months during which the audit would have been completed.
(3) If any dealer liable to get his accounts audited under sub-section (1) fails to get his accounts audited and furnish a true copy of the audit report within the time specified in sub-section (2), the Commissioner shall, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, a sum by way of penalty equal to 0.1% of the turnover as he may determine to the best of his judgment in his case in respect of the said period.
Explanation:- For the purpose of this section, "Accountant" means
(i) a Chartered Accountant within the meaning of the Chartered Accountant Act, 1949 and includes a person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 is entitled to be appointed to act as an auditor of Companies registered under the said Act or
(ii) a Cost Accountant within the 49 meaning of the Cost and Works Accountant Act, 1959.
[13] In order to decide the case from the right perspective, it would be appropriate to make a reference to the decision of the Apex Court in A.V. Fernandez vs. The State of Kerala reported in AIR 1957 SC 657 wherein the Apex Court vide para 29 of the Judgment laid down the law with regard to the interpretation of taxing statutes. The Apex Court has held as follows:
CRP 28/2017 Page 15 of 25
"29.....It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the Sales Tax Authorities."
[14] The Apex Court reiterated the same principle of law in Ajmera Housing Corporation and Anr. Vs. Commissioner of Income Tax reported in (2010) 8 SCC 739 wherein the Apex Court vide para 36 of the judgment held as follows:
"36. It is trite law that a taxing statute is to be construed strictly. In a taxing Act one has to look merely at what is said in the relevant provision. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. There is no room for any intendment. There is no equity about a tax. (See: Cape Brandy Syndicate Vs. Inland Revenue Commissioners (1921)1KB 64 and Federation of A.P. Chambers of Commerce & Industry & Ors. Vs. State of A.P. & Ors.). In interpreting a taxing statute, the Court must look squarely at the words of the statute and interpret them. Considerations of hardship, injustice and equity are entirely out of place in interpreting a taxing statute."CRP 28/2017 Page 16 of 25
[15] It is an admitted fact that the impugned order of assessment dated 29.09.2016 passed by the Assessing Officer covers the period of the assessment from 2011-12 to 2014-15 meaning thereby the tax period in question ended on 31st March, 2015. [16] As provided under sub-section (1) of Section 33 of the TVAT Act, 2004, no assessment under Section 31 and 32 shall be made after expiry of five years from the end of the tax period to which the assessment relates.
[17] The undisputed facts of the case are that the impugned assessment order dated 29.09.2016 was passed by the Superintendent of Taxes (Assessing Officer) after issuing notice to the Revision Petitioner. [18] Section 33 of the TVAT Act, 2004, as quoted above, lays down the prescription of limitation of 5 years from the end of the tax period to which the assessment relates. The revision petitioner contends that the order of assessment for the years 2011-12 to 2014-15 being ultra vires of Section 33 need to be quashed and set aside and in consequence the order CRP 28/2017 Page 17 of 25 dated 28.02.2017 of the Revisional Authority upholding the assessment order should also be quashed. [19] At this juncture, it would be appropriate to further quote the relevant provision of the TVAT Act, 2004 with regard to the limitation bar on assessment of value added tax, which is as follows:
33. No assessment after five years:-
............................................................................................................ ............................................................................................................
(1) No assessment under Sections 31 and 32 shall be made after expiry of five years from the end of the tax period to which the assessment relates.
[20] Apparently the assessment order dated 29.09.2016 for the tax period from 2011-12 to 2014-15 was made after issuing notice dated 31.08.2016 to the assessee. The tax period of 2011-12 ended on 31st March, 2012 for which the assessment order was made on 29.09.2016 within the period of limitation provided under Section 33 of the TVAT Act and obviously, therefore, the assessment order for the years 2013-14 & 2014-15 also made on 29.09.2016 was well within the period of limitation of five years. As such the contention of the petitioner that the assessment order is hit by limitation is devoid of merit. CRP 28/2017 Page 18 of 25 [21] The next point which arises for our consideration is whether the imposition of penalty@15% on the petitioner on the ground of evasion of tax by way of concealment of taxable turnover was made without affording reasonable opportunity of hearing to the petitioner. [22] The assessment order dated 29.09.2016 (Annexure-IV) reads as follows:
"Since the dealer has tried to conceal actual taxable turnover by way of suppressing the actual import of taxable goods with a view to evading tax, I hold the dealer guilty of offence under this Act and impose penalty @15% of the concealed tax amount besides charge interest as per the provisions of the TVAT Act, 2004"
[23] In the case in hand, admittedly no separate show cause notice in terms of Section 75A was issued to the dealer before imposition of 15% penalty on him. At this juncture it would be appropriate to reproduce Section 75A of the TVAT Act which reads as under:
"75A. Notwithstanding anything contained elsewhere in the Act, if the Commissioner, in course of any proceeding under this Act is satisfied that any dealer has evaded in any way the liability to pay tax, he may direct that such dealer shall pay by way of penalty in addition to the tax payable by him, a sum not exceeding one and half times of that amount but which shall not be less than ten percent of that amount:
Provided that no order under this Section shall be made unless the dealer has been heard or has been given a reasonable opportunity of being heard."CRP 28/2017 Page 19 of 25
[24] Thus, from a plain reading of Section 75A and having regard to the strict letter of the law, it becomes abundantly clear that penalty cannot be imposed for mere failure to pay tax unless there are materials to show that such failure was deliberate with a view to evade payment of tax liability. Evidently there was no intention on the part of the assessee to evade or avoid taxes and therefore, levy of 15% penalty being totally illegal is quashed by us for the entire period of assessment.
[25] The other points arising for our consideration are whether the penalty equal to 0.1% of the turnover was imposed on the assessee in terms of Section 53(3) of the TVAT Act after affording reasonable opportunity of hearing to the assessee and whether the assessee could be saddled with the liability in absence of prescribed form in terms of Section 53(1) of TVAT Act. [26] Sub-section(1) of Section 53 of the TVAT Act, as quoted above, provides for auditing of the accounts of the assessee within six months of the end of the year, where, in any particular year, the gross turnover of his company exceeds forty lacs rupees and CRP 28/2017 Page 20 of 25 obtain a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particular as may be prescribed. [27] Sub-section(2) of Section 53 provides that the dealer shall furnish true copy of the report obtained by him under sub-section (1) to the Commissioner of Taxes by the end of the month after expiry of the period of six months during which the audit as under
sub-section(1) would have been completed.
[28] Sub-section (3) of Section 53 provides that where the dealer fails to get his accounts audited and furnish the audit report within time as under sub-
section (2), the Commissioner of Taxes shall, after giving the dealer, reasonable opportunity of hearing, impose on him, in addition to tax payable, a sum by way of penalty equal to 0.1% of the turnover.
[29] The law is thus clear that imposition of penalty equal to 0.1% of the turnover for non submission of the audit report in terms of Section 53 of the TVAT Act is mandatory. The assessment order dated 29.09.2016 as well as the order dated 28.02.2017 of the Commissioner of Taxes in Revision CRP 28/2017 Page 21 of 25 Case No 18 to 21 of 2016 go to show that the dealer failed to submit the audit report within time in terms of Section 53 of the TVAT Act. Neither before the assessing officer nor before the Revisional Authority (Commissioner of Taxes) the assessee ever pleaded that he submitted the audit report in terms of Section 53(1) and (2) of the TVAT Act within the time specified in sub-section (2) of Section 53. Rather he pleaded before the Assessing Authority as well as the Revisional Authority (Commissioner of Taxes) that he could not submit the audit report within time. The following extract of the assessment order dated 29.09.2016 would be useful to appreciate the issue:
"In response to the said notice the dealer submitted reply in writing dated 14/09/2016 wherein stated that "with reference to your notice no.294 dated 31.08.2016, you had raised objection on why penalty u/s 53(3) should not charged for non submission of Audited Accounts and also charged tax on difference of value of stock transfer for the year 2013-14 & 2014-15.
We would like to submit our submissions against the Show cause as follows:
Regarding non-submission of audited accounts as per section 53(1) of the TVAT Act, 2005, "where in any particular year, the gross turnover of a dealer exceeds forty lacs rupees or such other amount as the Commissioner, may, by notification in the official Gazette specify. Then such dealer shall get his accounts, in respect of that year audited by an accountant within six months from the end of that year and obtain a report of such audit in the prescribed form duly signed and verified by such CRP 28/2017 Page 22 of 25 accountant and setting forth such particulars as may be prescribed".
We would like to submit that Ruchi Soya Industries Limited is a reputed FMCG corporate company having registered office in Mumbai and head office in Indore and almost all the state and union territory of India we have our branches & factories. Our consolidated annual account is maintained from the registered office for entire branches, factories and regional offices as over India which is duly audited by the Chartered Accountant and regular course we are filing the same before the Registrar of Companies, Income Tax & other related authorities. We are not maintaining any separate annual accounts for any branches all over India. In this particular case in the state of Tripura, we have also sent copy of audited combined annual accounts to our tax consultant who is looking over Sales Tax matter in Tripura.
Under the circumstance, we apologize and hereby request you to kindly consider the penalty for non- submission of the audited accounts for the branches of the particular state. We have no intention to evade any tax or evade any statutory obligation. We would like to inform you that we had filed monthly return as well as tax payment within due time."
[30] Further, the order dated 28.02.2017 of the Revisional Authority (Commissioner of Taxes) runs as follows:
"Sri Ajit Kr. Jha, the petitioner is present. Sri A.Barman, Superintendent of Taxes, H.Q is also present and presented the case records.
............................................................................................................ .................................................................................................
Sri Jha submitted that the Superintendent of Taxes, Charge-VIII, Agartala has imposed penalty U/S 53(3) of the TVAT Act, 2004 for non-submission of statement of audited accounts as required U/S 53(1) and 53(2) of the TVAT Act,2004. He further submitted that the report of audited accounts for the years under assessment were prepared within the time as prescribed in the TVAT Act,2004 but due to some internal problem the report CRP 28/2017 Page 23 of 25 could not be submitted in due time and were submitted during hearing of assessment cases. He also submitted to waive penalty as revenue was not affected for such non- submission......................"
[31] There is, therefore, no doubt that the assessee did not submit the audit report in terms of Section 53(1) and (2) of the TVAT Act within the time prescribed under the said Section. The findings of the assessing officer as well as the Revisional Authority, as quoted above, are not disputed by the petitioner. Evidently, the assessment order dated 29.09.2016 imposing mandatory penalty equal to 0.1% of the turnover of the company of the assessee was imposed on the assessee in terms of Section 53(3) after hearing the assessee. Therefore, the assessment order with regard to imposition of penalty equal to 0.1% of the turnover of the company of the assessee suffers from no illegality.
[32] Another point which arose for our consideration was whether the assessee could be saddled with the liability of non submission of the audited accounts of his company in absence of the Form prescribed under Section 53(1) of the TVAT Act. In this regard, it would be appropriate to have a look CRP 28/2017 Page 24 of 25 into the plea taken by the petitioner in his pleadings. The averments made by the petitioner in his Civil Revision Petition in this regard runs as follows:
"(v). That in reference to the Notice cited above, it is the specific case of the petitioner that prior to that Notice dated 31.08.2016 no Notice was served upon the petitioner to produce or submit the 'Final accounts & balance sheet etc.' However, obeying the said notices the petitioner appeared before the Superintendent of Taxes(Assessing Authority), Charge-VIII with all records of the business including 'Final accounts & balance sheet etc.' Hence, for non-submission of the said 'Final accounts & balance sheet etc.' as per Section 53 of TVAT Act, 2004, the petitioner can't be penalized under Section 53(3) of TVAT Act,2004. It is also stated that the Company maintains its consolidated annual accounts from the registered office for its entire branches, factories and regional offices all over India.
(vi). That, however, the Superintendent of Taxes (Assessing Authority), Charge-VIII, Agartala did not accept the return (s) of turnover filed by the Petitioner at the time of assessment and assessed tax vide his Order of Assessment dated 29.09.2016 to his best of judgment violating the law prescribed under the TVAT Act, 2004 and Rules made thereunder and giving no natural justice. In the said Order of Assessment dated 29.09.2016, the Superintendent of Taxes (Assessing Authority) not only disallowed the claim of the Petitioner's return(s) in making transactions by From 'F' but also determined the Turnover in short(TOD) ex-parte without serving notice following the mandate of the Act levying tax, interest and penalty upon the Petitioner under Section 31(1), 25(4) & 53(3) of TVAT Act,2004 for delay in submission of return(s) though statutory penal interest was deposited against such delay in submission of return(s) and also imposed penalty @0.1% under Section 53(3) of TVAT Act, 2004 for non submission of Audited Balance Sheet of the Company in due time. It is to be noted that prior to the Notice of Assessment, no notice was issued by the Superintendent of Taxes(Assessing Authority), Charge-VIII under Section 27 of TVAT Act,2004 for scrutiny of return and for such non-submission of Audited Balance Sheet of the Company under Section 53 of TVAT Act,2004 though it is well known to the Ld. Assessing Authority that the Company sends its CRP 28/2017 Page 25 of 25 goods covered under Form 'F' under the CST Act, 1956 into the State of Tripura and the return(s) against such transactions filed by the petitioner was/were all known to him as the returns were officially accepted and issued Notices of Demand dated 01.10.2016. Even no Tax Audit under Section 28 of TVAT Act, 2004 was done by the Taxing Authorities."
[33] It would appear from the above pleadings that it is no case of the petitioner that he could not submit the audit report within time in terms of Section 53(2) of the TVAT Act due to non availability of such Form.
[34] In view of the above discussion, we dispose of Civil Revision Petition by upholding the assessment order dated 29.09.2016 and the order dated 28.02.2017 of the Revisional Authority(Commissioner of Taxes) in Revision case No.18 to 21 of 2016 except the penalty equal to 15% imposed by the assessing officer.
The petition is thus partly allowed. Interim order, if any, stands vacated.
JUDGE JUDGE
Saikat Sarma
CRP 28/2017