Himachal Pradesh High Court
Himachal Aluminium And Conductors vs State Of H.P & Another on 27 November, 2020
Bench: Sureshwar Thakur, Chander Bhusan Barowalia
IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CWP No. 2998 of 2020 .
Reserved on : 9.11.2020 Decided on : 27.11.2020 Himachal Aluminium and Conductors....... Petitioner.
Versus
State of H.P & another Respondents.
Coram:
Hon'ble Mr. Justice Sureshwar Thakur, Judge. Hon'ble Mr. Justice Chander Bhusan Barowalia, Judge. Whether approved for reporting?1 For the petitioner: Mr. Atul Jhingan, Advocate.
For the respondents: Mr. Hemant Vaid and Mr. Ashwani
Sharma, Additional Advocate(s)
General with Mr. J.S Guleria, Deputy
Advocate General.
(Through video conferencing).
Sureshwar Thakur, Judge
The petitioner-Industrial Unit, is registered, with the Directorate of Industries, and, is also registered under the Himachal Pradesh Vat Act, statute whereof, now after an amendment made thereto, is, nomenclatured, as, the Himachal Pradesh Value Added Tax, 2005 (for short "the Act"). The returns of VAT, as, filed before the statutory authority, by the petitioner Unit, in the year 2015, 1 Whether reporters of the local papers may be allowed to see the judgment?
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became accepted by the afore. However, in the year 2020, an order .
of reassessment of VAT, became issued/rendered, upon the petitioner Unit, and, is comprised in Annexure P-12A, and, the afore order of reassessment, was, succeeded by a tax demand notice, embodied in Annexure P-14.
2. Since alternate to the institution of the extant writ petition, before this Court, the writ petitioner is leveraged, with a right to recourse, a, statutory remedy of constituting, an appeal thereagainst before the Appellate Authority, thereupon prima-facie the existence of the afore alternative statutory remedy, vis-a-vis, the, institution, of the extant writ petition, wherethrough, the writ petitioner, strives for a judicial review being made qua impugned Annexures P-12A and P-14, hence prima-facie renders it to be not maintainable before this Court.
3. However, the afore bar or embargo, against the institution, of the extant writ petition before this Court, wherethrough, annulment(s) of the impugned Annexures, is strived for, is not a rigid or an absolute bar, rather it holds certain well expostulated exceptions, inasmuch as the statutory action, as made ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...3...
by the authority concerned, being evidently ridden with gross and .
flagrant breaches, of, statutory norms; (a) the alternative remedy available under the statute is not effective but a mere formality; (b) statutory authority concerned not acting in accordance with the apposite statutory provisions; (c) where the statutory authority has acted in defiance of the fundamental principles of judicial procedure; (d) where the statutory authority has resorted to invoke provisions which are repealed; (e) where the statutory authority has passed an order in total violation of principles of natural justice.
The afore apposite exceptions are borne in a judgment reported in (2014) 1 SCC 603, titled as Commissioner of Income Tax and others versus Chhabil Dass Agarwal.
4. The vigor, of the afore initial address, as, made by the learned counsel for the writ petitioner, to, draw leverage from the afore exceptions, to, the settled jurisprudential principle appertaining, to exercise of writ jurisdiction by the High Court, inasmuch, as, the exercisings or re-coursings by it, of, the power of judicial review hence invested under Article 226 of Constitution of India, being circumscribed with a fetter, hence, rested, on, an ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...4...
alternate thereto befitting statutory remedy becoming bestowed .
upon the aggrieved litigant, (i) pointedly inasmuch from the striking apposite exception appertaining to the impugned Annexures wanting in legal sanctity, (ii) given theirs becoming sparked, from a blatant infringement becoming visited upon Section 23, of, the Act, provisions whereof, stand extracted hereinafter, is to be tested, and, determined.
"Re-assessment of tax
23. (1) If in consequence of definite information which has come into his possession, the Assessing Authority discovers that the turnover of the business of a dealer has been under-assessed or escaped assessment in any year, the Assessing Authority may, at any time within three years from the date of assessment under section 21, proceed to re- assess the tax payable on the turnover which has been under-assessed or has escaped assessment:
Provided that the Assessing Authority may also take action to impose the penalty and interest under this Act:
Provided further that no order of re-assessment or imposition of penalty and interest shall be made unless the dealer is afforded a reasonable opportunity of being heard in the prescribed manner. (2)The Assessing Authority or any such Authority as may be prescribed may, at any time, within one year from the date of any order passed by him and subject to such conditions as may be prescribed, rectify any clerical or arithmetical mistake apparent from the record."
5. The learned counsel for the writ petitioner, in making dependence(s), upon, the mandate encapsulated in Section 23, of, the Act, has made a pointed allusion to a statutory bar, becoming encapsulated therein against reopening(s) of under-assessed or escaped assessment(s), appertaining to any year, especially when ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...5...
more than three years, evidently elapse since the making of the .
initial order, of, assessment. Necessarily, the afore made submission, does hold tenacity in the face, of, the initial order of assessment, as, made on 19.1.2016 becoming reopened in the year 2020, and obviously when more than three years elapsed, since the making of, the, initial order of assessment, thereupon the afore statutory bar of limitation becomes attracted, vis-a-vis, the order of reassessment, as, made on 13.7.2020. Even if the latter appertains to the assessment year(s) 2010, and, 2011, thereupon the order of re-assessment, as, borne in Annexure P-12A, and, in consequence whereof a demand notice, was issued upon the petitioner, demand notice whereof, becomes embodied in Annexure P-14, does render both to fall, within the mischief, of, the apposite limitation encapsulated in Section 23 of the Act, provisions whereof become extracted hereinbefore.
6. Further more, though Section 24 of the Act, begins with non-obstante coinage, and, hence operates as a proviso, to the mandate encapsulated, in, the preceding therewith section 23, of, the Act, wherein a bar of limitation of three years, against ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...6...
reassessment(s) being made of under-assessed or escaped .
assessment, becomes encapsulated, (i) thereupon unless in Section 24 of the Act, any specific extension(s) to the period of limitation hence contemplated in Section 23 of the Act, become mentioned, and, theirs also become mandated, to, become generated from audit observations or audit paras, appertaining, to or unfolding under-
assessed or escaped assessment, (ii) thereupon also, hence the embargo of limitation of three years, prescribed in Section 23 of the Act, would be construable, to, become hence extended or thereupon, the statutory prescription of an inflexible, and, rigid bar of limitation of three years, for the relevant purpose, would become undone. However, a reading of section 24 of the Act, provisions whereof stand extracted hereinafter, make(s) explicit expressions, that the period of limitation, of three years, for the relevant purpose, and as, becomes enumerated in Section 23 of the Act, being relax-
able or becoming deemed, to be extended, for, giving effect to (a) any order made by the Court or (b) any authority under the Act.
However, if the audit observation or audit verification, is to be construed to be "other authority" under the Act, thereupon the afore ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...7...
authority concerned hence making the audit verification, become .
enjoined to occur, in, the Act supra. Contrarily, the authority making the audit para or audit observation, does not occur, in the Act. Consequently, the discovery therefrom, of, the purported under-assessed or escaped assessment, when hence evidently happened beyond a period of three years, hence stipulated in Section 23 of the Act, wherewithin any endeavour, of, reassessment, of, purported under-assessed or escaped assessment of tax, becomes rather barred to be made (a) nor when the authority making the audit observation, becomes expressly contemplated in the Act, for thereupon, it, falling within the domain, of, the expression "other authority" carried, in, Section 24, of, the Act, (b) for, hence upon its making the afore audit observation, beyond a period of limitation, of, three years, and, it hence unfolding any purported under-assessed or escaped assessment, rather facilitative, of, an apposite re-assessment, or, hence thereupon prima-facie the afore actions becoming clothed with validity. Hence, the learned counsel for the petitioner, has succeeded in establishing, that the, order of reassessment visits flagrant transgression(s), upon the ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...8...
statutory bar, of, limitation contemplated in Sections 23 and 24 of .
the Act, hence, for the relevant purpose. In sequel the alternative statutory remedy, as, available to the petitioner, is neither efficacious nor a befitting remedy, rather thereupon this Court becomes empowered, to, make a judicial review, of, the impugned Annexures.
Period of limitation for completion of assessment or re-
assessment not to apply in certain cases.
24. (1) Notwithstanding the provisions relating to the period of limitation contained in Section 21 or Section 23 or in any other provisions of this Act, assessment or re-assessment may be made at any time in consequence of, or to give effect to, any order made by any Court or other Authority under this Act.
(2) Where the assessment proceedings relating to any dealer remained stayed under the orders of any Court or other Authority for any period, such period shall be excluded in computing the period of limitation for assessment or re-
assessment specified in Section 21 or Section 23 or in any other provision of this Act."
7. The afore power of re-assessment, of, under-assessed or escaped assessment, of, tax as borne in the apposite returns, filed by the taxable unit, becomes visibly vested in the assessing authority, through statutory empowerment, becoming conferred, upon the assessing authority. In sequel thereto, the latter through an order borne in Annexure P-12A, anvilled its reassessment, of, the initially assessed tax qua the petitioner-Unit, upon, an audit observation.
The apposite order of reassessment, as, embodied in Annexure P-
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12-A, displays qua an allusion being made to the audit .
observations, appertaining to the purported under-assessed or escaped tax, and, further reveals qua theirs arising from purported breaches being visited, to, the provisions of Section 11(1) and 11 (3) of the Act, provisions whereof stand extracted hereinafter:-
"11 (1) Subject to the provisions of this Act, the input tax credit which a purchasing registered dealer (hereinafter in this section called ' the purchasing dealer') may claim, in respect of taxable sales made by him during the tax period, shall be-
(i) r the amount of input tax paid or payable by such purchasing dealer to the selling registered dealer, on the turnover of purchases of such goods as have been sold by him during the tax period; and
(ii) calculated and allowed as provided in this Section, and subject to such other conditions as may be prescribed."
11(3)[Except the goods in respect of which input tax credit is not admissible under this Act or the rules made thereunder, the input tax credit shall be allowed to the purchasing dealer in respect of the turnover of purchases of such taxable goods as have been sold by him during the tax period, and to the extent of the amount of input tax paid by such purchasing dealer on the turnover of purchases of such taxable goods made by him in the State, from a registered dealer holding a valid certificate of registration, for the purposes of,--]
(a) sale or re-sale of goods by him in the State; or
(b) sale in the course of inter-State trade or commerce; or
(c) sale in the course of export out of the territory of India; or
(d) use as raw material or as capital goods in the manufacturing or processing of taxable goods for sale of the nature referred to in clauses (a), (b) or (c);
or
(e) use as containers or packing material of taxable goods for sale of the nature referred to in clauses (a),(b), (c) or (d):
Provided that if the goods so purchased are used partially for the purposes specified in this sub-section, the input tax credit shall be allowed proportionate to the extent these are used for the purposes specified in this sub-section:::: Downloaded on - 01/12/2020 20:17:56 :::HCHP
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Provided further that input tax credit on fuels and lubricants, shall be allowed only to the extent by which the amount of input tax .
paid in the State exceeds 4 percent subject to the condition that such fuels and lubricants are used in the manufacture of taxable goods or captive generation of power."
8. Even though, in Annexure P-12A, apart from, an allusion being made, to the audit observations, appertaining to breaches being made to the afore extracted apposite statutory taxing provisions, also an independent application of mind, by the reassessing authority, is made both to the factual, and, to the statutory provisions applicable thereon, and, whereafter the purported under-assessed income is computed therein, (i) yet the learned counsel appearing for the writ petitioner, has made a concerted effort, to rid of apposite import or to rid of efficacy, all the afore renditions occurring therein. His afore endeavour is rested, upon the afore trite exceptions appertaining, to, exercise of writ jurisdiction, by this Court, given availability, of, a befitting alternative statutory remedy (i) inasmuch as, upon, the reassessment order, lacking in application of mind, and, (ii) it reiteratedly becoming aroused from a blatant breach becoming visited, upon, the afore apposite statutory provisions. Consequently, he ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...11...
reiteratedly argues that the extant writ petition is the most befitting .
remedy, for the redressal, of, the grievances, of, the writ petitioner.
9. In the afore endeavour he has made reliance, upon, the photocopy of a computer generated judgment, of, the Hon'ble Apex Court, in case rendered in case titled as FIS Global Business Solutions India Pvt. Ltd. Versus Principal Commissioner of Income Tax-3, New Delhi and another decided on 16.11.2018 in +W.P.(C) 12277/2018, C.M. APPL.47539/2018, (i) wherein it has been expostulated that the expostulations of law, borne in a judgment rendered in case title as Carlton Overseas Pvt. Ltd. v. Income Tax Officer & Ors (2009) 318 ITR 95 (ii) inasmuch as the reassessment of the completely assessed tax, upon, apposite tax returns, filed by the taxable unit, being valid, only upon, tangible material being made available to the revenue, and, also that hence an audit objection or an audit report issued by the revenue rather not constituting potent material. The afore expostulations of law borne in the judgment supra, for all the hereinabove reasons, is pointedly and squarely applicable to the factual matrix available hereat, and, in consonance therewith, this Court proceeds to set aside the ::: Downloaded on - 01/12/2020 20:17:56 :::HCHP ...12...
impugned Annexures, through its invoking the power of judicial .
review, invested under Article 226 of the Constitution.
10. In view of the above, there is merit in the petition, and, the same is accordingly allowed. All pending applications stand disposed of accordingly.
( Sureshwar Thakur),
r Judge.
27th November, 2020 ( Chander Bhusan Barowalia ),
(priti) Judge.
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