Allahabad High Court
M/S Ramky Infrastructure Limited vs State Of U.P. And 2 Others on 15 December, 2020
Bench: Surya Prakash Kesarwani, Yogendra Kumar Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 05 Case :- WRIT TAX No. - 671 of 2020 Petitioner :- M/S Ramky Infrastructure Limited Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Shubham Agrawal Counsel for Respondent :- C.S.C. Hon'ble Surya Prakash Kesarwani,J.
Hon'ble Dr. Yogendra Kumar Srivastava,J.
1. This case was listed as a fresh case on 09.12.2020 relating to Assessment Year 2012-13 but no one appeared on behalf of the petitioner to press the writ petition. Therefore, the case was adjourned for 14.12.2020. On 14.12.2020, none appeared for the petitioner to press the writ petition even in the revised call. Therefore, the case was adjourned for 15.12.2020.
2. Today also none has appeared for the petitioner to press the writ petition even in the revised call. Sri C.B. Tripathi, learned Special Counsel for the State-respondents is present.
3. This writ petition has been filed praying for the following relief:
"(a)Certiorari quashing the impugned order dated 20.08.2020 passed by the no.3.
(b) Mandamus/ Prohibition restraining the respondent no.2 from initiating any assessment/ reassessment proceedings against the petitioner in pursuance of the order dated 20.08.2020 passed by the respondent no.3.
(c) Mandamus directing the respondent authorities to produce/ bring on record the exparte assessment order dated 18.3.16, the order sheet maintained by the assessing authority, report furnished by the assessing authority (respondent no.2) before the Joint Commissioner (Executive), Mirzapur, as recorded in the order dated 30.3.19, registers R-5A, 5B;"
4. The impugned order dated 20.08.2020 is an authorisation granted by the Additional Commissioner Grade-I, Commercial Tax, Varanasi Zone - II, Varanasi under Section 29(7) of the U.P. VAT Act, 2008 (hereinafter referred to as 'the Act, 2008') read with Section 9(4) of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 (hereinafter referred to as 'the Act, 2007').
5. The Additional Commissioner has granted the authorisation on the facts of the present case on the ground that purchases of U.P. iron and steel of Rs.15,51,47,792/-, purchase of Ex-U.P. iron and steel of Rs.7,61,61,195.04 and bitumen of Rs.13,03,70,473/- escaped assessment to entry tax under the Act, 2007 inasmuch as for reasons mentioned in the impugned order, the assessment order of entry tax under Section 9(4) of the Act, 2007 for the Assessment Year 2012-13 could not be passed.
6. Section 29(1)/(7) of the U.P. VAT Act, 2008 (hereinafter referred to as 'the Act, 2008') are reproduced below:
"29. Assessment of tax of turnover escaped from assessment.- (1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or re-assess the dealer to tax according to law :
Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment or full assessment as the case may be.
Explanation I. - Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment.
Explanation II. - For the purpose of this section and of section 31, "assessing authority" means the officer or authority who passed the earlier assessment order, if any, and includes the officer or authority having jurisdiction for the time being to assess the dealer.
Explanation III. - Notwithstanding the issuance of notice under this sub-section, where an order of assessment or re-assessment is in existence from before the issuance of such notice it shall continue to be effective as such, until varied by an order of assessment or re-assessment made under this section in pursuance of such notice.
(7) Where the Commissioner, on his own or on the basis of reasons recorded by the assessing authority, is satisfied that it is just and expedient so to do, authorises the assessing authority in that behalf, such assessment or re-assessment may be made within a period of eight years after expiry of assessment year to which such assessment or re-assessment relates notwithstanding such assessment or re-assessment may involve a change of opinion:
Provided that it shall not be necessary for the Commissioner to hear the dealer before authorising the assessing authority."
7. Perusal of the afore-quoted provisions shows that if the Assessing Authority has reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as may be considered necessary, assess or re-assess the dealer to tax according to law. Section 29(3) of the Act, 2008 provides that except as otherwise provided in this section or elsewhere in this Act, no order of assessment or re-assessment under any provision of this Act for any assessment year shall be made after the expiration of three years from the end of such assessment year. Sub-section (7) of Section 29 provides for extended period of limitation upto eight years. It provides that where the Commissioner, on his own motion or on the basis of reasons recorded by the assessing authority, is satisfied that it is just and expedient so to do, authorises the assessing authority in that behalf, such assessment or re-assessment may be made within a period of eight years after expiry of assessment year to which such assessment or re-assessment relates.
8. Thus, the normal period of limitation for assessment or reassessment is three years as provided under Sub-Section (3) of Section 29. Beyond the aforesaid period of limitation, an Assessing Authority can make assessment or reassessment if he is authorised by the Commissioner by order passed under Sub-Section (7) of Section 29, which empowers the Commissioner to issue authorisation for making assessment or reassessment within a period of eight years after expiry of assessment year to which the assessment or reassessment relates.
9. In the present set of facts, there is no dispute that somehow for the Assessment Year 2012-13, assessment under the Act, 2007 escaped to notice of the Assessing Authority. Detailed circumstances leading to the escaping and passing of the assessment order under the Act, 2007 for the Assessment Year 2012-2013 have been mentioned in the impugned order. Thus, extended period of limitation under Sub-section (7) of Section 29 of the Act, 2008 was invokable for which authorisation has been granted by the Additional Commissioner by the impugned order dated 20.08.2020.
10. From perusal of the writ petition, it appears that the basic objection of the petitioner to the impugned order is that reassessment proceedings can take place only when there is an assessment order and there is reason to believe that there has been a case of no assessment or escaped assessment. In support of the aforesaid objection, the petitioner has relied upon a judgment of this Court in the case of Catalysts vs. State of U.P. and others, 2014 UPTC 1054 (DB)(Para-26).
11. The judgment in the case of Catalysts vs. State of U.P. and others (supra) was rendered by this Court in three writ petitions, namely, Writ Tax No.704 of 2010, 705 of 2010 and 706 of 2010. In Writ Tax Nos.704 and 705, both of 2010, the petitioners have challenged the order passed by the competent authority granting permission for initiation of proceedings under Section 21. Both these writ petitions were dismissed by this court. Third writ petition, i.e. Writ Tax No.706 of 2010, was allowed by this court on the facts of that case. To appreciate facts of the aforesaid judgment in Writ Tax No.706 of 2010, it would be appropriate to reproduce paragraphs-7, 25, 26 and 27 of the said judgment, as under:
"7. In Writ Petition No.706 of 2010, the learned counsel submitted that the Assessing Officer treated enzymes as a unclassified item and taxed the same at the rate of 10% for the assessment year 2006-07 under the U.P. Trade Tax Act. The petitioner preferred an appeal, which was allowed and the matter was remanded back to the Assessing Officer for fresh assessment. During the pendency of assessment proceedings before the Assessing Officer pursuant to the remand order of the appellate authority reassessment proceedings were initiated under Section 21 of the Act. The learned counsel submitted that during the pendency of original assessment proceedings the question of escaped assessment does not arise and, therefore, question of issuance of notice under Section 21 of the Act was wholly illegal and had been issued without any application of mind and was liable to be quashed. In support of his submission, the learned counsel has placed reliance on various decisions, which will referred hereinafter.
25. With regard to Writ Petition No.706 of 2010, we find that the Assessing Officer had treated enzyme as an unclassified item and had taxed it at the rate of 10% for the assessment year 2006-07 under the U.P. Trade Tax Act. The petitioner filed an appeal, which was allowed and the assessment order was set aside and the matter was remitted to the Assessing Officer to pass a fresh assessment order. During reconsideration of the matter reassessment proceedings was initiated under Section 21 of the Act.
26. In M/s Harbilas Prabhu Dayal Vs. Commissioner of Sales Tax, 1979 UPTC 999 a Full Bench of this Court held that once proceedings are remanded by the appellate authority, the entire matter is at large.
27. We are of the opinion that reassessment proceedings can only take place when there is an assessment order and there is reason to believe that there has been a case of under assessment or escaped assessment. In the event, there is no assessment order there can be no reassessment proceedings. "
12. The afore-quoted portion of the judgment in the case of Catalysts (supra) is the foundation of the present writ petition. Perusal of the aforesaid judgment in Writ Tax No.706 of 2010 would show that the facts were that the assessment order passed by the Assessing Authority was set aside by the Appellate Authority for the Assessment Year 2006-07 under the U.P. Trade Tax Act, 1948 and the matter was remanded to the Assessing Authority to pass a fresh assessment order. During remand proceedings, the Assessing Authority eventually initiated proceedings under Section 21 of the U.P. Trade Tax Act, 1948, which is para materia with Section 29 of the Act, 2008. On these facts, relying upon a full bench judgment in the case of M/s Harbilas Prabhu Dayal Vs. Commissioner of Sales Tax, 1979 UPTC 999, this court held that hence proceedings are remanded by the appellate authority, the entire matter is at large. In the background of these facts and the legal position, this court held in para-27, which has been relied by the petitioner in the present case; that reassessment proceedings can only take place when there is an assessment order. Since no assessment order was passed by the Assessing Authority pursuant to the remand order and the entire matter was at large before him, therefore, it was held by this court that there is no question of initiating reassessment proceedings. Thus, the aforesaid judgment in the case of Catalysts (supra) is distinguishable on the facts of the present case.
13. Besides above, if the judgment in the case of Catalysts (supra) is read in the manner as interpreted by the petitioner, it shall be in conflict with the law settled by a Full Bench (5 Judges) of this court in the case of Commissioner of Sales Tax vs. Jag Mohan Nath (1972) 29 STC 663 (All) in which the Full Bench interpreted the pari materia provision of Section 21(1) of the U.P. Sales Tax Act, 1948 and held as under (Majority view):-
"33. The principle of law laid down by the Supreme Court in the cases of Ghanshyamdas v. Regional Assistant Commissioner, Sales Tax, Nagpur MANU/SC/0216/1963 and Anandji Haridas & Co. Private Ltd. v. S.P. Kushare MANU/SC/0298/1967 applies equally to assessments under the U.P. Sales Tax Act and assessment proceedings in cases where no returns are filed by a dealer can be made both under Section 7(3) and Section 21(1). Which of the two sections will apply to a particular case will, however, depend on the circumstances of each case. The non-furnishing of returns by a dealer, and the consequent failure to pay the tax due, vest in the assessing authority the power to make a best judgment assessment both under Section 7(3) and Section 21(1) of the Act. If the circumstances are such as to attract the provisions of Section 21(1), the assessment will be made under that provision, otherwise under Section 7(3). It is not incumbent on the assessing authority to make the assessment first under Section 7(3) and then only to proceed under Section 21 for bringing to tax the turnover not assessed under Section 7(3). The powers contemplated by Section 7(3) and Section 21 are independent of each other and can be resorted to independently according to the material available to the assessing authority."
14. The Full Bench judgment in the case of Jag Mohan Nath (supra) has also been followed by a Division Bench of this court in Commissioner, Sales Tax U.P. vs. Bhuj Singh Mohan Singh, Bulandshahar (S.T.R. No.214 of 1971, decided on 04.09.1974) 1974 Vol.VI Tax Law Diary 134.
15. Perusal of sub-section (7) of Section 29 of the Act, 2008 leaves no manner of doubt that it empowers the Commissioner to grant authorisation and also empowers the Assessing Authority to make assessment or reassessment within a period of eight years after expiry of assessment year to which such assessment or reassessment relates. Sub-section (1) of Section 29 empowers the Assessing Authority to make assessment or reassessment where he has reason to believe that whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof. Thus, where whole of the turnover has escaped assessment on account of not passing an assessment order, the provisions of Section 29(1) of the Act, 2008 can be invoked by the Assessing Authority and the authorisation under sub-section (7) can be granted by the competent authority. It is not incumbent upon the Assessing Authority to make the assessment first and then only to proceed under Section 29(1) for bringing to tax the turnover not assessed.
16. For all the reasons afore-stated, we find that the writ petition is without substance. Consequently, it is hereby dismissed. However, there shall be no order as to costs.
Order Date :- 15.12.2020 NLY