Madhya Pradesh High Court
Prashant Project Ltd. vs Dy. Commissioner Comm. Tax on 21 December, 2022
Author: Vivek Rusia
Bench: Vivek Rusia, Amar Nath Kesharwani
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE AMAR NATH (KESHARWANI)
WRIT PETITION No. 455 of 2005
BETWEEN:-
PRASHANT PROJECT LTD. 406-408, HERMES
ATRIUM PLOT NO.57, SECTOR-II, CBD BELAPUR,
NAVI MUMBAI-400 614 (MADHYA PRADESH)
.....PETITIONER
(BY SHRI PM CHOUDHARI, LEARNED SENIOR COUNSEL ALONGWITH AK
JAIN & SHRI ANAND PRABHAWALKAR, ADVOCATE)
AND
1. DIVISIONAL DEPUTY COMMISSIONER,
COMMERCIAL TAX, UJJAIN DIVISION
UJJAIN
2. ASSISTANT COMMISSIONER OF
COMMERCIA TAXES DEWAS ROAD,
UJJAIN (MADHYA PRADESH)
3. COMMERCIAL TAX OFFICER CIRCLE-I
UJJAIN (MADHYA PRADESH)
4. ASSISTANT COMMERCIAL TAX OFFICER
CIRCLE DEWAS (MADHYA PRADESH)
Signature Not Verified
Signed by: PRAVEEN
NAYAK
Signing time: 21-12-2022
19:25:04
2
.....RESPONDENTS
( SHRI UMESH GAJANKUSH, ADDITIONAL ADVOCATE GENERAL) This petition coming on for orders this day, JUSTICE VIVEK RUSIA passed the following:
''Reserved on : 15.12.2022''
''Pronounced on : 21 .12.2022''
O RDER
The petitioner has filed the present Writ Petition against the common order dated 20.12.2004 passed by the respondent No.1 in Revision No.228/2004/State and No. 145/2004/Entry Tax for the period 01.04.2000 to 31.03.2001 under the M.P. Commercial Tax Act,1994 (hereinafter referred to as the MPCT Act ) and the M.P. Sthaniya Kshetra Me Mal KePravesh Par Kar Adhiniyam, 1976 (hereinafter referred to as the 'Entry Tax Act') respectively and the orders of assessment dated 12.02.2004 passed by respondent No.3 in assessment case No.894/2001/State and No.895/2001/ Entry Tax respectively for the said period.
The case of the petitioner
2. The petitioner is engaged in the business of undertaking various types of works contracts including fabrication, erection, and civil works. The petitioner entered into an agreement with Indian Oil Corporation Ltd., Mumbai (hereinafter referred to as the "IOCL") on 15.10.1999 for fabrication erection and commissioning of BQ Steel plates for 2 x 700 MT Mounded type vessels for storage of LPG/ Propane at Ujjain LPG Bottling Plant. The total cost of the project was Rs.4,64,40,000.00/-.
3. The petitioner submitted an application in Form 4 to the Commercial Tax Officer, Circle I, Ujjain (respondent No.3) on 07.09.2000 for grant of registration certificate and Provisional registration certificate in Form 5 was issued. Thereafter respondent No.3 vide order dated 27.12.2000 Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 3 rejected the application for issuance of final certificate. Being aggrieved by the aforesaid rejection, the petitioner preferred revision before the Deputy Commissioner, Commercial Tax, Ujjain, which was allowed vide order dated 16.02.2001, and the matter was remanded back to the respondent No.3. After the remand, due opportunity of hearing was given to the petitioner and vide order dated 19.03.2001 a permanent registration certificate was granted from w.e.f. 07.09.2000. Hence the petitioner became registered dealer w.e.f. 7.9.2000 and for the period from 09.05.2000 till 06.09.2000, the petitioner was treated as unregistered dealer.
4. In assessment case pending against the petitioner, vide order dated 20.05.2003, the respondent No.3 directed to issue a notice to the petitioner in Form 47 for appearance on 24.06.2003. According to the petitioner, no notice was served to him, thereafter respondent No.4 also issued notice for appearance on 06.11.2003. According to petitioner, respondent No. 4 had no jurisdiction to make assessment of the petitioner since the petitioner was registered dealer in circle-I, Ujjain. Thereafter vide order dated 22.12.2003, the assessment proceedings were transferred from respondent No.4 to respondent No.3 on the ground of turnover of the petitioner is likely to exceed Rs. 50 lacs, thereafter, the respondent No.3 transferred the case to respondent No.2 considering receipts of amount of Rs. 2,36,06,000/- in the above contract work of IOCL, however, again the respondent No.2 returned the case to respondent No.3 on the basis of turnover. Again the respondent No.3 issued a notice in Form 47 dated 27.01.2004 for the period 01.04.2000 to 31.03.2001 for assessment of State/Entry Tax which includes unregistered period as well as registered period. According to the petitioner notice for assessment under Section 27(6) MPCT was neither issued for registered period nor for unregistered period. Therefore, notice under Section 26(4) the MPCT for levy of Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 4 penalty was not justified. Since the petitioner did not patriciate in the proceedings accordingly ex-parte order of assessment passed on 12.02.2004 in assessment case No.894/2001/State for the period 01.04.2000 to 31.03.2001 under the MPCT. According to the petitioner, the respondents did not determine any turnover and made assessment separately for the unregistered under Section 27 (6) (a) on the basis of receipts of payments. The respondent No.3 also passed exparte order of assessment under the Entry Tax Act on 12.02.2004 in assessment case No.895/2001 (Entry Tax) for the same period i.e. 01.04.2000 to 31.03.2001.
5. Being aggrieved by the aforesaid orders of assessment under the both local enactment the petitioner filed two separate revisions applications enclosing the declaration in Form 42 certifying the TDS amount of Rs.9,73,235/- made by IOCL. Both the revisions were registered as Revision No.228/2004/State and No.145/2004/Entry Tax. The respondent No.1 vide common order dated 20.12.2004 in both the revisions remanded the case with the direction to respondent No.2 to make assessment after affording the proper opportunity of hearing.
6. The petitioner has approached before this Court against common orders inter alia on the ground that the order is without jurisdiction and illegal having been made beyond the period of limitation of one calendar year as provided in section 27 (6) of the MPCT. According to the petitioner, the judicial duty was cast upon the respondent No.1 to decide the matter in respect of the assessment for the unregistered period from 09.05.2000 to 06.09.2000 made by the respondent No. 3 without jurisdiction and illegal since the proceedings of assessment initiated under Section 27(6) of the MPCT Act were barred by limitation. Hence for such ab-inito proceeding no remand was warranted for the purpose of fresh assessment.
Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 5Notice and interim relief
7. Vide order dated 06.09.2005 by way of interim relief, this Court directed to continue the proceedings for assessment but restrained respondent No.2 to pass final order and also observed that since the legal and short issue is involved hence matter can be heard finally in the month of November, 2005. Thereafter, petitioner filed rejoinder, respondents took time to file additional return.Adjournments were sought on 10.02.2014 and thereafter the petition came up for hearing on 19.01.2022, therefore, by virtue of interim order since then the proceedings are stayed and final order could not be passed.
Reply filed by respondents
8. The respondents have filed reply denying each and every fact and ground mentioned in the petition. So far as issue of limitation is concerned, the respondents have stated that the assessment for the period 01.04.2000 to 31.03.2001 consists of two periods (1) from 09.05.2000 to 06.09.2000 when the petitioner was an unregistered dealer and during that period the whole transaction took place and money was receipts from IOCL and (2) second periodis started from 07.09.2000 to 31.03.2001 when the petitioner was enrolled as registered dealer in the department. For unregistered the proceedings started on 24.07.2001, notice for assessment was issued on 25.10.2001 and final order was passed on 23.11.2002. Therefore, the proceedings were initiated well within the time. Likewise the period when the petitioner got registered with the Department, the proceedings were initiated well within time as the limitation is two calendar years as per Section 27 of the MPCT Act. The assessment was initiated within two years and was liable to be completed 31.12.2003 and the said period was extended by the gazette notification No.A-3-91-2001-ST-V [61] upto 16.02.2004 and in this case the assessment was completed on 12.02.2004.
Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 69. Respondents have also filed reply justifying the jurisdiction of respondent No.3 being appropriate authority. The petitioner disclosed the fact of turnover of Rs.4,75,22,281/- in the revision, therefore, the revisional authority has rightly remanded case to the Assistant Commissioner of Commercial Tax. It is further submitted that as per Section 26 of the MPCT Act registered dealer has to file regular monthly returns for first two years with sufficient proof of payment of tax which the petitioner has failed to do so. Section 48 of the Act, 1994 mandates the dealer to report change of business and address of business within 30 days. The petitioner failed to comply the said provisions. Despite notice, the petitioner did not appear in assessment proceedings to raise all these grounds, however, the revisional authority has only remanded the matter, therefore, the petitioner should not have any grievance about the non service of notices and exparte assessment proceedings. It is further submitted that as per Section 62 of the MPCT Act, no prejudice has been caused to the petitioner as the revisional authority instead of passing the order on merit has remanded the matter for fresh assessment by the respondent No.2.
Submission of learned senior counsel of the petitioner
10. Shri P.M .Choudhary, learned senior counsel argued that for unregistered period two assessment orders have been passed by the authority, which the petitioner came to know only after filing of the reply in this case. As per the reply, the proceedings were initiated for unregistered on 24.07.2001 and order was passed on 23.11.2003, then how the fresh assessment order dated 11.02.2004 has been passed for the same period, therefore, there cannot be two orders for the same assessment year period. The orders passed on subsequent proceedings are time barred and earlier order passed which is filed alongwith return is a nullity, which the petitioner is not required to challenge in this petition as well as by way of Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 7 appeal or revision. It is further submitted by learned senior counsel that the respondents in its return has admitted that the proceedings were transferred to the assessing authority from respondent No.4 and the assessment had to be completed within stipulated time, therefore, this fact lost site of the assessing authority and therefore the assessing authority has again re- access the whole period including the unregistered period. It is further submitted that the assessment order dated 23.11.2002 (unregistered period) is not subject matter of this petition and unless the said order is served upon the petitioner it cannot be said to be valid order and operative against the petitioner, however, by way of rejoinder, the petitioner has pleaded that order dated 22.12.2003 passed by the respondent No.3 for unregistered period was without jurisdiction, illegal and void ab-inito as he had no jurisdiction to pass the order as the turnover was more than 50 lacs. Counter submissions on behalf of learned Additional Advocate General
11. Learned Additional Advocate General contended that the petition has been filed against the remand order hence not to be entertained as the petitioner is free to raise all the ground before the Assessment Officer. The revisional authority opened the case and directed the respondent No.2 to pass afresh assessment order after giving opportunity of hearing, therefore, the issue of limitation can also be raised before the revisional authority. The revisional authority is competent to examine validity of separate assessment proceedings and order dated 23.11.2002. The petitioner has already participated in the fresh assessment proceedings but order has not be passed because of interim order passes by this Court, therefore, petition be dismissed with direction to respondent No.2 to pass final order against which the petitioner shall have remedy to file revision. Despite knowledge of order dated 23.11.2002, the petitioner has not challenged the same till date.
Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 812. Learned Additional Advocate General also submitted that, vide order dated 06.09.2005, on the basis of pleadings in petition and return, this Court has directed for listing of final hearing in the month of November,, 2005 as the stay has been granted for passing the final order. The petitioner instead of arguing the matter finally, filed the rejoinder and State had to file additional return and matter was dropped from the list of final hearing and pending till date and petitioner is enjoying the interim protection as till today tax has not been paid nor penalty has been deposited.
Appreciations & Conclusion
13. The only issue which requires for consideration whether there can be separate proceedings for unregistered period and registered period or there can be common proceedings undersub section (a) and (b) of Section 27(6) of the MPCT Act ?
Section 27(6) is reproduced below:
(6) (a) If upon any information which has come into his possession, the Commissioner is satisfied that any dealer, who has been liable to pay tax in respect of any period has failed to apply for registration, the Commissioner shall within 1[one calendar year] from the date of completion of the proceedings under sub-section (1) of Section 6, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed, to assess to the best of his judgement the amount of tax due from the dealer in respect of the whole of such period and the Commissioner may if he is satisfied that the dealer has willfully failed to apply for registration direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum 2[not less than two times but not exceeding five times] of that amount.
(b) In respect of periods subsequent to the period referred to in clause (a), the amount of tax due from a dealer referred to in the said clause shall be assessed separately for each year.
14. Sub-Section (a) says that if the Commissioner is satisfied that any dealer, who has been liable to pay tax in respect of any period has failed to Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 9 apply for registration, shall within one year from the date of completion of the proceedings under sub-section (1) of Section 27(6), after giving the dealer a reasonable opportunity of being heard and if satisfied that the dealer has willfully failed to apply for registration direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed. Sub-section (b) says that in respect of periods subsequent to the period referred to in clause (a), the amount of tax due from a dealer referred to in the said clause shall be assessed separately for each year. After determining the liability to pay tax and penalty the fresh assessment proceedings can be initiated for entire assessment year under section 27(6)(b) by way of composite proceedings, in which the dealer can be held liable to pay tax and penalty under section 27(6) (a) for unregistered period and for remaining period, can be held liable to pay the amount of tax due. Since in this case both the unregistered and registered period are falling in one assessment year hence common order has been passed by the respondent No.3. Even sub-section (a) provides that if Commissioner comes to the conclusion that the dealer willfully failed to apply for registration direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed. In the present case, the petitioner entered into contract with Indian Oil Corporation on 15.10.1999 but applied for registration only on 07.09.2000, therefore, the period prior to it was considered as unregistered period. The petitioner is required to satisfy the assessing authority whether there was willful failure to apply or not for which the revisional authority has rightly remanded the matter back to the authority. Penalty has been imposed only on Commercial Tax not on Entry Tax.
15. The petitioner did not participate in commercial Tax assessment case No.1559/2000. The petitioner did not appear despite notice in respect of the purchase of goods and execution of the work. Notice dated Signature Not Verified Signed by: PRAVEEN NAYAK Signing time: 21-12-2022 19:25:04 10 19.03.2002, 29,03.2002 and 20.11.2002 were served by way of affixture also, hence, ex-parate order under Section 27(6)(a) of the MPCT Act was passed. At that time work in question of IOCL was going on therefore, assessment order was made only in respect of purchase of material and the services rendered till date to the tune of Rs. 50 lacs but at the time of subsequent assessment case No.894/2001, the work had already been completed. Entire payment was received of Rs.2,36,06,000/- during unregistered period and the final assessment order has been passed including the penalty. IOCL vide letter dated 09.07.2005 has certified to the Sale Tax Officer, Ujjain-I that total payment to the contractor i.e. petitioner was made of Rs.50934532/- and with deduction of WCT of Rs.973235/- against work order dated 22.10.1999 and the payment was made four years ago,the TDS certified was issued on 22.06.2004. Copy of letter is filed as Annexure R/5 by the respondents. There is also misrepresentation by the petitioner in respect of total amount received from the IOCL. The petitioner has presented case before the revisional authority that in execution of work in question amount of Rs.47522281/- and there is no rebuttal to this fact stated in the additional return, therefore, revisional authority has rightly remanded the matter back to the respondent No.2 for fresh assessment.
In view of the above discussion the Writ Petition is dismissed with the cost of Rs. 10,000=00 (In words: Ten Thousand only) payable to the respondents.
(VIVEK RUSIA) AMAR NATH (KESHARWANI)
JUDGE JUDGE
Praveen
Signature Not Verified
Signed by: PRAVEEN
NAYAK
Signing time: 21-12-2022
19:25:04