Gauhati High Court
Mechfield Industries vs Commissioner Of Taxes And Ors. on 7 April, 2004
Equivalent citations: [2006]146STC695(GAUHATI)
JUDGMENT P.G. Agarwal, J.
1. Heard Mr. B.P. Todi, learned Senior Counsel for the petitioner and Mr. H.K. Mahanta, learned Government Advocate appearing for the State.
2. The petitioner before us M/s. Mechfield Industries was a registered dealer under the Assam Sales Tax Act, 1947 and Assam Finance (Sales Tax) Act, 1956. For the periods ending September 30, 1981, March 31, 1982, September 30, 1982, March 31, 1983 and September 30, 1983 the petitioner filed its return as required and assessments were made. The assessment for the period September 30, 1983 was completed by the Superintendent of Taxes, Unit-D, Guwahati, Under Section 9(3) of the Assam Finance (Sales Tax) Act, 1956 on March 15, 1984. Thereafter, the Deputy Commissioner of Taxes, Guwahati, Zone-C, vide letter dated December 1, 1997 issued show cause notice to the petitioner for the following effect:
No. GE/Zone-C/569/97-98/1,001 dated December 1, 1997 To M/s. Mechfield Industries, Paltanbazar, Guwahati.
Sub: Notice Under Section 36 of the Assam General Sales Tax Act, 1993 for the periods ending September 30, 1981, March 31, 1982, September 30, 1982, March 31, 1983 and September 30, 1983.
Whereas it has been considered that the assessment orders passed by the Superintendent of Taxes for the periods ending September 30, 1981, March 31, 1982, September 30, 1982, March 31, 1983 and September 30, 1983 under the Assam Finance (Sales Tax) Act, 1956 are erroneous in so far as it was prejudicial to the interest of the Revenue, you are therefore asked to appear before the undersigned on December 15, 1997 at 11 A.M. along with relevant books of accounts and documents for the purpose of verification Under Section 36(1) of the Assam General Sales Tax Act, 1993.
Sd/-
Deputy Commissioner of Taxes Guwahati, Zone-C. The petitioner informed the revisional authority that as the matter is fourteen years old, the relevant documents are not with them. Thereafter, the Deputy Commissioner of Taxes, Guwahati, vide impugned order dated July 12, 2000 entertained the revision suo motu cancelling the earlier assessment and directed for fresh assessment orders to be passed for the above period. Accordingly, the respondent authority, the Superintendent of Taxes, Guwahati, Unit-D, issued a notice to produce the books of account for the above period vide order dated October 10, 2000 (annexure 5). The petitioner has therefore, approached this Court in this application Under article 226 of the Constitution.
3. The impugned order of the revisional authority dated July 12, 2000 and the notices issued by the Superintendent of Taxes on October 10, 2000 have been challenged mainly on the ground of limitation. There is no dispute at the bar that the last assessment order for the period ending September 30, 1983 was completed on March 15, 1984. A copy of the said order is available as annexure 1 in this petition.
4. Section 36(1) of the Assam General Sales Tax Act, 1993 reads as follows:
36(1) The Commissioner may call for and examine the records of any proceeding under this Act and if he considers that any order passed therein by any person appointed Under Sub-section (1) of Section 3 to assist him is erroneous insofar as it is prejudicial to the interests of the Revenue, he may, after giving the dealer or the person to whom the order relates an opportunity of being heard and after making or causing to be made such enquiry as he deems necessary, pass such order as the circumstances of the case justify, including an order enhancing or modifying the assessment of tax or penalty or cancelling such order and directing that a fresh order should be made:
Provided that no order under this Sub-section shall be made after the expiry of eight years from the end of the financial year in which the order sought to be revised was made.
Admittedly, the jurisdiction of entertaining suo motu revision was exercised by the concerned authorities after long sixteen years of the assessment order.
5. Mr. Mahanta, learned Counsel has submitted that in an exceptional case or circumstance, the period of limitation Under Section 41 of the aforesaid Act can be extended. But we find no such provisions under the Act. On the other hand, Section 41 of the Assam General Sales Tax Act, 1993, reads as follows:
41. Preservation of books of accounts, documents, etc.--All books of accounts and documents referred to in Sub-section (1) of Section 40 and all declarations and other documents laid down under Sub-section (2) of Section 10 shall be preserved by the dealer for a period of not less than eight years from the end of the year to which they relate:
Provided that where an assessment, reassessment, appeal or revision for any period is pending at the end of the aforesaid period of eight years such books of accounts, documents and declarations shall be preserved till such pending proceedings are finally disposed of.
If we read Section 41 of the Act along with Section 36, we find that the liability of the dealer is to preserve the books of account till the period of eight years from the date of assessment or the date of final disposal.
6. The rules 61 and 62 of the Assam Sales Tax Rules, 1947 also contain similar provisions for preserving the accounts for a period of eight years only.
7. In the present case, the assessment was made Under Section 9(3) of the Assam Finance (Sales Tax) Act, 1956 and Under Section 12 of the said Act which has been repealed on July 1, 1993. The rectification of the orders could have been done within a period of three years Under Section 12 of the repealed Act. Further, Under Section 11 of the repealed Act even in the case of evasion and escape, the Commissioner had the jurisdiction to issue notice and reopen the matter at any time within eight years of the end of the aforesaid period for which the matter was required to be reopened. As stated above, as per notice, the respondent authorities claimed that the present case is to be erroneous assessment. Whereas, in the case of evasion and escape, the maximum period for resetting the suo motu revision proceeding was eight years. This is not a case where the revisional proceeding was resetting before expiry period of eight years. The first notice was issued on December 1, 1997, i.e., after more than thirteen years of the last assessment.
8. The learned Counsel for the petitioner in support of his submission has relied on the decision of the Bombay High Court in the case of Commissioner of Sales Tax v. Ramdas Laxmidas [1976] 38 STC 354. The honourable Bombay High Court relying on the decision of the apex Court in the case of Ghanashyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur, reported in [1963] 14 STC 976 held:
........Thus, a dealer is not required thereafter to preserve his books of account, duplicates and counterfoils of bills and cash memoranda, certificates and declarations given to him by those dealers, who purchased goods from him, etc., until the expiry of the period of limitation for the initiation of suo motu revision proceedings or reassessment proceedings or when no period of limitation is prescribed for the initiation of such proceedings, for all times; and if he does not preserve such documents, no adverse inference can be drawn against him by the reassessing or revising authority nor can such authority in suo motu revision or reassessment proceedings cancel, withdraw or disallow any deduction or exemption allowed to him in his assessment proceedings on the strength of such documents produced in the course of his assessment proceedings or in appeal or revision proceedings arising therefrom. There is no statutory obligation on a dealer to so preserve these documents, and to hold otherwise on the grounds of an implied obligation or as a rule of prudence would run counter to commonsense and notions of justice, equity and good conscience.
9. In view of the specific provisions under the Assam Finance (Sales Tax) Act, 1956 since repealed and provisions of rule 36 read with Section 41 of the Assam General Sales Tax Act, 1993, we have no hesitation to hold that the jurisdiction of entertain to suo motu is available to the competent authority within a period of eight years from the date of final assessment order or date of final disposal of the revision, if any and liability of the dealer to preserve the documents will be accordingly eight years from the above period and thereafter the respondent authority will be debarred from taking any adverse view for non-production of the documents.
10. In the present case, the revision was admitted and decided more than after expiry of eight years of the financial assessment order and as such, we hold that the impugned order dated July 12, 2000 was passed without jurisdiction and accordingly, it is set aside. The order, passed by the Deputy Commissioner of Taxes, Zone-C and subsequent order dated October 10, 2000 passed by the Superintendent of Taxes, Unit-D Guwahati, also stands quashed.
11. Writ petition stands disposed of. No order as to costs.