Chattisgarh High Court
State Of Chhattisgarh vs M/S Tata Teleservices Limited on 18 August, 2022
Bench: Arup Kumar Goswami, Parth Prateem Sahu
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AFR
HIGH COURT OF CHHATTISGARH BILASPUR
WA No. 687 of 2018
1. State of Chhattisgarh Through Its Principal Secretary,
Commercial Tax Department, Mantralaya, Raipur
Chhattisgarh.
2. The Commissioner, Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer, Circle-5, Raipur Chhattisgarh.
---- Appellants
Versus
M/s Tata Teleservices Limited Having Its Registered Office At
Tower-1, 10th Floor, Jeevan Bharti, 124, Connaught Circus, New
Delhi- 110001 And Branch Office At Guru Ghasidas Plaza
Complex, IInd And IIIrd Floor, G.E. Road, Amapara Chowk,
Raipur 492001 (Chhattisgarh) Through Its Authorised Signatory
And Manager Mr. Ravi Notwani.
---- Respondent
WA No. 691 of 2018
1. State of Chhattisgarh Address - Through Its Principal Secretary, Commercial Tax Department, Mantralaya, Raipur Chhattisgarh.
2. The Commissioner Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer Circle- 5, Raipur Chhattisgarh.
---- Appellants Versus M/s Tata Teleservices Limited Address - Having Its Registered Office At Tower - 1, 10th Floor, Jeevan Bharti, 124, Connaught Circus, New Delhi 110001 And Branch Office At Guru Ghasidas Plaza Complex, Ilnd And Illrd Floor, G. E. Road, Amapara Chowk, Raipur 492001 Chhattisgarh, Through Its Authorised Signatory And Manager Mr. Ravi Notwani.
---- Respondent 2 WA No. 705 of 2018
1. State of Chhattisgarh Through Its Principal Secretary, Commercial Tax Department, Mantralaya, Raipur Chhattisgarh.
2. The Commissioner, Commercial Tax, Raipur Chhattisgarh.
3. Commercial Tax Officer, Circle-5, Raipur Chhattisgarh.
---- Appellants Versus M/s Tata Teleservices Limited Having Its Registered Office At Tower-1, 10th Floor, Jeevan Bharti, 124, Connaught Circus, New Delhi- 110001 And Branch Office At Guru Ghasidas Plaza Complex, IInd And IIIrd Floor, G.E. Road, Amapara Chowk, Raipur 492001 (Chhattisgarh) Through Its Authorised Signatory And Manager Mr. Ravi Notwani.
---- Respondent
For Appellants : Mr. Vikram Sharma, Deputy Govt. Advocate
For Respondent : Mr. Sumit Nema, Senior Advocate assisted by
Mr. Anand Dadariya, Advocate
Date of hearing : 05.07.2022
Date of Judgment : 18.08.2022
Hon'ble Shri Arup Kumar Goswami, Chief Justice Hon'ble Shri Parth Prateem Sahu, Judge C A V Judgment Per Arup Kumar Goswami, Chief Justice Heard Mr. Vikram Sharma, learned Deputy Government Advocate for the appellants. Also heard Mr. Sumit Nema, learned senior counsel, assisted by Mr. Anand Dadariya, learned counsel, appearing for the respondent.
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2. Three separate re-assessment orders, all dated 26.12.2016, under Section 22(1) of the Chhattisgarh Value Added Tax Act, 2005 (for short, 'VAT Act') had been passed for the period 01.04.2010 to 31.03.2011 (Assessment Year 2010-11), for the period 01.04.2011 to 31.03.2012 (Assessment Year 2011-12) and for the period 01.04.2012 to 31.03.2013 (Assessment Year 2012-13). Three separate writ petitions came to be filed, namely, Writ Petition (T) No.77 of 2017 in respect of Assessment Year 2010-11, Writ Petition (T) No.78 of 2017 in respect of Assessment Year 2011-12 and Writ Petition (T) No.79 of 2017 in respect of Assessment Year 2012-13. Identical prayers were made in the writ petitions except the change in the Assessment Year. It would be appropriate to extract the prayers made in Writ Petition (T) No.77 of 2017 :
"10.1 That, this Hon'ble Court may kindly be pleased to quash to Instruction No.12/2013 dated 05.07.2013 (P/2) issued by the Commissioner respondent No.2.
10.2 To quash the re-assessment orders dated 26.12.2016 for the period 2010-11 passed by the respondent No.3.
10.3 To hold that notification No.17 is not applicable on the petitioner.
10.4 To hold that re-assessment proceeding is without jurisdiction as well as based on change of opinion.4
10.5 To hold that no penalty is leviable on the petitioner.
10.6 To hold that entire purchases cannot be classified as "telecommunication cables and accessories" in view of the specific purchase list filed by the petitioner.
10.7 Any other relief, including the cost of this petition, as it appears to be fit and appropriate to this Hon'ble Court."
3. By a common order dated 20.03.2018, the writ petitions were allowed quashing the re-assessment orders and the penalty imposed.
4. The appellants have filed three writ appeals challenging the aforesaid order. Writ Appeal No.687 of 2018 arises out of the order passed in Writ Petition (T) No.79 of 2017, Writ Appeal No.691 of 2018 arises out of the order passed in Writ Petition (T) No.77 of 2017 and Writ Appeal No.705 of 2018 arises out of the order passed in Writ Petition (T) No.78 of 2017.
5. Initially, the writ appeals were allowed by the judgment dated 24.10.2019, by which the order passed by the learned Single Judge was set aside holding that challenge to the assessment / re-assessment order is not maintainable in view of existence of alternative remedy of appeal under Section 48 of the VAT Act, and accordingly, the assessee was directed to move the Appellate Authority within a period of 45 days. It was observed that on such 5 appeal being filed by the assessee, the Appellate Authority would consider and decide the appeal in accordance with law, on its own merits and without raising objection as to the period of limitation.
6. The assessee had preferred Special Leave Petitions, being SLP (C) Nos.29127 of 2019, 29180 of 2019 and 29795 of 2019 (registered as Civil Appeal Nos.1993 of 2022, 1994 of 2022 and 1995 of 2022, respectively) before the Hon'ble Supreme Court and by an order dated 14.03.2022, the Hon'ble Supreme Court had set aside the order of the Division Bench of this Court dated 24.10.2019 and relegated the parties before the Division Bench for reconsideration of the restored / remanded writ appeals on their own merits and in accordance with law. The parties were directed to appear before this Court on 18.04.2022.
7. Accordingly, the writ appeals were listed on 18.04.2022 before this Court. Thereafter, the appeals were heard on 21.06.2022, 04.07.2022 and 05.07.2022.
8. The Hon'ble Supreme Court had observed that the appellants before the Supreme Court had specifically raised a preliminary objection before the assessing officer that the proposed action had become time-barred, and hence, notice under Section 21(7) of the VAT Act was illegal and unjust being void ab initio. As the issue of limitation would go to the root of the matter, the same could be taken as a preliminary objection before the Competent Authority and the Competent Authority was under an obligation to answer the same one way or the other, and accordingly, disagreed with the view expressed 6 by the Division Bench, whereby the appellants were directed to take recourse to statutory remedy of appeal.
9. The writ petitioner is a Private Limited Company incorporated under the provisions of the Companies Act, 1956 and engaged in providing telecommunication services to its customers under a license granted to it by the Department of Telecommunication. It is pleaded that under Section 3(2) of the Entry Tax Act, 1976 (for short, 'Entry Tax Act'), a person is liable for tax only in respect of notified goods i.e. "telecommunication cables and its accessories" and items like telecommunication equipments / components are not accessories to the telecommunication cables, and hence, cannot be subjected to tax under Section 3(2) of the Entry Tax Act.
10. However, the Commissioner, Commercial Tax issued Instruction No.12/2013 dated 05.07.2013 to all the Executive Authorities of the Department to levy entry tax on all such telecom companies who are purchasing and causing entry of the telecommunication cables and accessories in the State of Chhattisgarh.
11. In consequence of the Instruction dated 05.07.2013, Commercial Tax Officer (Enforcement) prepared a report dated 24.02.2014 for the period 2010-11, 2011-12 and 2012-13 in respect of the writ petitioner and proposed to levy tax at the rate of 4% treating the materials as telecommunication cables and accessories. Pursuant thereto, the assessing authority issued notices dated 20.05.2014 for the period 2010-11, 2011-12 and 2012-13 under Sections 19(4), 21(6), 7 22 and 54 read with Rule 30(1) of Chhattisgarh Value Added Tax Rules, 2006, for short, VAT Rules.
12. It is pleaded that the writ petitioner had raised a preliminary objection against the notices. However, the Commercial Tax Officer, Circle- 5, Raipur, Chhattisgarh issued notice in Form-27 mentioning Section 22(1) of the VAT Act, initiating re-assessment proceeding for the periods 2010-11, 2011-12 and 2012-13. It is pleaded that Form-27 notice is issued under Section 21(4) of the VAT Act for regular assessment and for re-assessment, notice in Form-28 is prescribed. Such notice was objected to by the writ petitioner by filing objection contending, amongst others, that the same is time barred and that re- assessment proceedings is without jurisdiction. However, Commercial Tax Officer, without considering the same in its proper perspective, passed re-assessment orders dated 26.12.2016 under Section 22(1) of the VAT Act levying entry tax on non-scheduled goods treating them as scheduled goods as also imposing penalty.
13. At paragraph 3 of the impugned judgment, the learned Single Judge formulated a question for consideration as follows:
"The short question of law in the batch of writ petitions is, whether in absence of any assessment order passed in the original proceeding under Section 21(7) of the VAT Act, the assessing officer has power and jurisdiction to reassess the said deemed reassessment proceeding under Section 22(1) of the VAT Act and further the consequential question would be, whether in 8 that case, the assessing officer is justified in levying penalty under Section 22(2) of the VAT Act."
14. Mr. Vikram Sharma, learned Deputy Government Advocate for the appellants submits that the VAT Act provides that assessment orders may be passed by the assessing officer or the assessment shall be deemed to have been made, if a registered dealer submits return along with prescribed documents. He has urged that for the purpose of taking recourse to Section 22 of the VAT Act, it is not necessary that there has to be an order of assessment and recourse can be taken under Section 22 of the VAT Act on the basis of the date of deemed assessment under Section 21(2) and the view taken by the learned Single Judge that to invoke jurisdiction under Section 22(1) of the VAT Act or to initiate proceedings for re-assessment, there must be an order duly passed by the assessing officer, is not correct. Relying on Rules 20(d) of the Chhattisgarh Value Added Tax Rules, 2006, for short, the VAT Rules, it is submitted by him that the date of acknowledgment to be obtained by him for submission of return shall be deemed to be the date of deemed assessment, as, if the acknowledgment is not obtained, in terms of Rule 20(e), it would be deemed that no return had been filed. The writ petitioner had furnished annual statement for the Assessment Years 2010-11, 2011-12 and 2012-13 on 30.11.2011, 30.11.2012 and 11.12.2013, respectively and as such, the said dates are to be treated as dates of deemed assessment, as no other order of assessment was passed. Accordingly, he submits that the order of the learned Single Judge is 9 liable to be interfered with. He relies on paragraphs 9 and 14 of the decision rendered in the case D. Saibaba Vs. Bar Council of India and Anr, reported in AIR 2003 SC 2502 and in paragraphs 16, 17 and 18 of M.C.D. Vs. Qimat Rai Gupta and Ors ., reported in AIR 2007 SC 2742.
15. Mr. Sumit Nema, learned senior counsel, appearing for the respondents, relies on the order passed by the learned Single Judge and drawing attention of the Court to Section 22 of the VAT Act and more particularly, clauses (a) to (e) therein, contends that there can be no manner of doubt that there has to be an order or assessment to invoke Section 22 of the VAT Act. He relies on the decision of the Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh v. Filter Co. reported in [1997] 107 STC 210 (SC).
16. Mr. Sharma, in reply, contends that in the case of Filter Co. (supra), there was no deemed assessment as is the case in the present cases.
17. We have considered the submissions of learned counsel for the parties and have perused the materials on record.
18. Chapter VI of the VAT Act is under the heading of "Returns, Assessment, Payment and Recovery of Tax". The writ petitioner is a registered dealer. Section 19(1)(a)(ii) provides that every registered dealer shall furnish return in such form, in such manner, for such period, by such dates and to such authority as may be prescribed. Section 19(1)(b) provides that every dealer required to furnish returns, 10 under clause (a), shall furnish a statement in such forms and manner for such period, by such date and to such authority as may be prescribed. Section 19(1)(c) provides that every dealer required to furnish audit report under sub-section (2) of Section 41 shall send such report of audit along with the statement referred to in clause (b). Section 19(5)(a) provides that if the Commissioner has reason to believe that the particulars given by a registered dealer in his return or returns furnished by him for any period under sub-section (1) or sub- section (2) are not correct, he may, by giving the dealer an opportunity of being heard, verify the correctness of such particulars in the return or returns. Section 19(5)(b) provides that if on such verification, it is found that the particulars given in the return or returns are not correct insofar as they relate to the application of the correct rate of tax, the calculation of tax or interest payable or claim of any deduction and input tax rebate, he shall by issuing a notice in the prescribed form require such dealer to make the payment of the additional amount of tax and/or interest payable by him within the period specified in such notice.
19. Before proceeding further, it would be appropriate to extract relevant provisions, namely, Sections 21(1), 21(2), 21(3), 21(4), 21(7)
(i), 21(7)(ii), 21(7)(iii), 22(1), 22(2) and 22(3) of the VAT Act for better appreciation:
"21. Assessment of tax.-(1) The assessment of every registered dealer shall be made separately for every year:11
Provided that -
(a) the Commissioner, may, subject to such conditions and restrictions as may be prescribed, assess the tax due from any dealer for any part of a year;
(b) a registered dealer who claims a refund of input tax rebate under the provisions of sub-section (4) of Section 13,-
(i) in his return for any quarter of a year and makes an application for that purpose, along with such return or before the date on which the return for the subsequent quarter becomes, due; or
(ii) in his returns for a year and makes an application for that purpose before the date on which the return for the first quarter of the subsequent year becomes due, the assessment of such dealer for that quarter or year, as the case may be shall be made in accordance with the provisions of sub-section (4) within a period of three months from the date of receipt of the application. (2) Where a registered dealer other than the registered dealer referred to in the proviso to sub-section (1) has furnished,-
(i) all the returns for a year and/or;
(ii) revised return for any quarter or quarters of such year, in the prescribed manner and within the prescribed time or before the date on which the return for the first 12 quarter of the subsequent year becomes due,
(iii) has paid the tax payable according to such returns or revised returns as also interest payable, if any, and
(iv) has furnished the statement under clause (b) of sub-
section (1) of section 19, within the prescribed time, the returns furnished or revised returns furnished by such dealer for that year shall be accepted and his assessment shall be deemed to have been made for the purpose of sub-section (1) :
Provided that the assessment under this sub-section of every such registered dealer who is required to furnish audit report under sub-section (2) of section 41 shall be deemed to have been made if such dealer has furnished the audit report along with the statement referred to in sub-clause (iv).
(3) Notwithstanding the provisions of sub-section (2), the commissioner shall select for reassessment a number of such dealers as he deems fit whose assessment for a year is deemed to have been made under sub-section (1) in accordance with the provisions of sub-section (2) and such selection shall be made within one calendar year from the said year.
(4) (a) The Commissioner shall serve on a registered dealer referred to in the proviso to sub-section (1) or in sub-section (3) or a registered dealer who is not eligible 13 for assessment under sub-section (2) with a notice in the prescribed form appointing a place and day and directing him-
(i) to appear in person or by an agent entitled to appear in accordance with the provisions of Section 24; or
(ii) to produce evidence or have it produced in support of the returns; or
(iii) to produce or cause to be produced accounts, registers; cash memoranda or other documents relating to his business;
(b) The Commissioner, after hearing the registered dealer or his agent and examining the evidence produced in compliance with the requirements of sub-
clause (ii) or sub-clause (iii) of clause (a) and such further evidence as he may require, shall assess or re- assess him to tax.
xxx xxx xxx
xxx xxx xxx
(7) (i) The assessment in respect of a registered dealer referred to in clause (a) of sub-section (4) shall be made within a period of two calendar years from the end of the period for which the assessment is to be made;
(ii) The assessment in respect of a dealer referred to in clause (b) of sub-section (6) for any period shall 14 be made within a period of two calendar years from the end of such period; and
(iii) In respect of a dealer, under clause (a) of sub- section (6) shall be made within a period of one calendar year from the commencement of proceedings under the said sub-section :
Provided that-
(a) where a fresh assessment has to be made to give effect to any finding or direction contained in any order under Sections 48, 49 and 55 or to any order or judgment of the Civil Court, High Court, Supreme Court; such assessment shall be made within one calendar year :-
(i) from the date of the order under Sections 48, 49 and 55 containing any finding or direction, and
(ii) from the date of initiation of assessment/re-
assessment proceeding in pursuance to the order, or judgment of Civil Court, High Court or Supreme Court, and
(b) where an order of ex-parte assessment of a registered dealer referred to in clause (a) of sub- section (4) is set-aside and case reopened under Section 36 for making a fresh assessment, such fresh assessment shall be made within a period of six calendar months from the date of setting aside 15 the ex-parte order of assessment or within the period laid down in clause (i) whichever is later; and
(c) nothing contained in this sub-section shall apply to proceedings initiated under Section 22 or any proceeding other than assessment or re-
assessment of tax that may be instituted under any other provisions of this Act.
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22. Assessment/reassessment of tax in certain circumstances.-(1) Where an assessment or re- assessment of a dealer has been made under this Act or the Act repealed by this Act and for any reason any sale or purchase of goods liable to tax under this Act or the Act repealed by this Act during any period,-
(a) has been under assessed or has escaped assessment; or
(b) has been assessed at a lower rate; or
(c) any wrong deduction has been made while making the assessment; or
(d) a rebate of input tax has incorrectly been allowed while making the assessment; or
(e) is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal, 16 which has become final, the Commissioner may at any time within a period of five calendar years from the date of order of assessment, or from the date of judgment or order of any Court or Tribunal proceed in such manner as may be prescribed, to assess or re-assess, as the case may be the tax payable by such dealer after making such enquiry as he considers necessary and assess or re-assess to tax. (2) The Commissioner shall, where the omission leading to assessment or re-assessment made under sub-section (1) is attributable to the dealer, in addition to interest at the rate specified in sub- clause (iii) of clause (a) of sub-section (4) of Section 19, impose upon him a penalty not exceeding twice the amount of tax so assessed or re-assessed but shall not less than one and half times of the amount of tax assessed.
(3) The assessment or re-assessment under sub- section (1) shall be made within a period of two calendar years from the date of commencement of the proceedings under the said sub-section."
20. Section 21(1) of the VAT Act provides that the assessment of every registered dealer shall be made separately for every year. Section 21(2) provides that where a registered dealer other than the registered dealer referred to in the proviso to sub-section (1) has 17 furnished - (i) all the returns for a year; and / or (ii) revised return for any quarter or quarters of such year, in the prescribed manner and within the prescribed time or before the date on which the return for the first quarter of the subsequent year becomes due; (iii) has paid the tax payable according to such returns or revised returns as also interest payable, if any; and (iv) has furnished the statement under clause (b) of sub-section (1) of Section 19, within the prescribed time, the returns furnished or revised returns furnished by such dealer for that year shall be accepted and his assessment shall be deemed to have been made for the purpose of sub-section (1). The proviso therein lays down that the assessment under sub-section (1) of Section 21 of every such registered dealer who is required to furnish audit report under sub- section (2) of Section 41 shall be deemed to have been made if such dealer has furnished the audit report along with the statement referred to in sub-clause (iv).
21. Section 21(3) of the VAT Act provides that notwithstanding the provisions contained in sub-section (2), the Commissioner shall select for re-assessment a number of such dealers as he deems fit whose assessment for a year is deemed to have been made under sub- section (1) in accordance with the provisions of sub-section (2) and such selection shall be made within one calendar year from the said year. Section 21(4)(a) provides that the Commissioner shall serve on a registered dealer referred to in the proviso to sub-section (1) or in sub- section (3) or a registered dealer who is not eligible for assessment under sub-section (2) with a notice in the prescribed form appointing a 18 place and day and directing him - (i) to appear in person or by an agent entitled to appear in accordance with the provisions of Section 24; or (ii) to produce evidence or have it produced in support of the returns; or (iii) to produce or cause to be produced accounts, registers, cash memoranda or other documents relating to his business. Section 21(7)(i) provides that the assessment in respect of a registered dealer referred to in clause (a) of sub-section (4) shall be made within a period of two calendar years from the end of the period for which the assessment is to be made.
22. Though notice dated 11.02.2016 under Section 21(4) of the VAT Act was issued to the writ petitioner, also indicating Section 22(1) in the said notice, no order of assessment was passed in terms of Section 21(7) of the VAT Act and admittedly, there was deemed assessment in respect of Assessment Years 2010-11, 2011-12 and 2012-13. Assessment proceeding under Section 21(7) of the VAT Act is to be completed within a period of two calendar years from the end of the period for which the assessment is to be made. It is also not in dispute that re-assessment order was passed in terms of Section 22(1) of the VAT Act.
23. Section 22(1) of the VAT Act, amongst others, provides that where the assessment or re-assessment of a dealer has been made under the VAT Act and for any reason any sale or purchase of goods liable to be taxed under the VAT Act or the Act repealed by this Act during any period, (a) has been under assessed or has escaped assessment, or (b) has been assessed at a lower rate or (c) any wrong 19 deduction has been made while making the assessment, or (d) a rebate of input tax has incorrectly been allowed while making the assessment, or (e) is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or tribunal which has become final, the Commissioner may at any time within a period of five calendar years from the date of order of assessment or from the date of judgment or order of any court or tribunal proceed in such manner as may be prescribed, to assess or re-assess, as the case may be the tax payable by such dealer after making such enquiry as he considers necessary, and assess or re- assess to tax.
24. As the word "order" appearing in Section 22(1) of the VAT Act is not defined in the VAT Act, the learned Single Judge took the aid of definition of "order" in Section 2(14) of the Civil Procedure Code, 1908 as also dictionary meaning of the word "order" in Black's Law Dictionary (Eighth Edition) to come to the conclusion that the words "order of assessment" employed in Section 22(1) of the VAT Act clearly denotes that there must be a formal adjudication by the assessing officer after taking into account the return and statutory compliances and the documents furnished by the petitioner in contradistinction to Section 21(2) which is a deemed assessment.
25. It was held by the learned Single Judge that the use of the words "from the date of order of assessment" appearing in Section 22(1) of the VAT Act clearly indicates that the original assessment order has to be in existence prior to exercising the power of re- 20 assessment. At paragraph 34 of the judgment under assailment, it was observed as follows :
"34. Thus, in sum and substance, in order to invoke jurisdiction under Section 22(1) of the VAT Act or to initiate proceedings for reassessment there must be an order of assessment duly passed by the assessing officer and it must be in existence as a condition precedent to invoke Section 22(1) and the limitation prescribed is five calendar years from the date of commencement of such proceedings, whereas the deemed assessment order under Section 21(2) is only reassessable under Section 21(3) of the VAT Act within one calendar year from such year. In case there is no order of assessment passed under Section 21(7) of the VAT Act, it cannot be subject to reassessment proceeding under Section 22(1) of the VAT Act."
26. Learned Single Judge at paragraphs 36 and 37 observed as follows :
"36. Reverting to the facts of the present case, after having noticed the judgment of the Supreme Court in Filter Co.'s case (supra), it is quite vivid that in the instant case, the matter was heard by the assessing officer up to 18-2-2015 after having issued notices on 12-5-2014, but no order of assessment was passed under Section 21(7) of the VAT Act, though original assessment proceedings were initiated by issuance of 21 notice on 12-5-2014 and matter was heard time to time by the assessing officer resulting into deemed assessment by virtue of the provisions contained in Section 21(2) of the VAT Act which was reassessable under Section 21(3) of the VAT Act within a period of one calendar year at the instance of the Commissioner on selection being made by him. Thus, the jurisdictional fact and condition precedent for invoking Section 22(1) of the VAT Act i.e. the order of assessment was not in existence on the date of issuing notice for reassessment under Section 22(1) of the VAT Act. Therefore, the learned assessing officer was jurisdiction-less to initiate proceeding for reassessment under Section 22(1) of the VAT Act and the order of reassessment ultimately passed is without jurisdiction and without authority of law and dehors the provisions contained in Section 22(1), as such, it deserves to be quashed.
37. This leads me to the next question as to whether the penalty imposed invoking Section 22(2) of the VAT Act is sustainable. Section 22(2) of the VAT Act provides that the commissioner shall, where the omission leading to assessment or reassessment made under sub-section (1) is attributable to the dealer, impose upon him a penalty not exceeding twice the amount of tax so assessed or re-assessed but shall not be less than the amount of tax assessed. The penalty is imposable 22 leading to reassessment where the omission leading to assessment or reassessment under sub-section (1) is attributable to the dealer. In the instant case, it has already been held that there is no order of assessment as the assessing officer did not pass any assessment order and thus, there is failure on the part of the assessing officer to pass the original assessment order.
For the reason that the order of reassessment is to beheld without jurisdiction and without authority of law, therefore, the order imposing penalty passed upon reassessment cannot stand and accordingly, it deserves to be quashed."
27. In Filter Co. (Supra), pursuant to an opinion sought under Section 42-B of the MP General Sales Tax Act, 1958, opinion was given by the Commissioner that "felt" submitted by the assessee, being a woolen fabric, was exempt from tax under the State Act and thus, for Assessment Years 1971-72 to 1977-78, the assessee was not assessed to sales tax. On the basis of the decision in Union of India vs. Gujarat Woollen Felt Mills, reported in (1977) 2 SCC 870, wherein it was held by the Hon'ble Supreme Court that "felt" manufactured by the assessee was liable to excise duty, the opinion given earlier by the Commissioner was cancelled and the assessment proceedings for the Assessment Years 1971-72 to 1977-78 were revived under the provisions of Section 19(1) of the State Act and assessment of sales tax was made. In that context, the Hon'ble 23 Supreme Court at paragraphs 3 and 4 observed as follows:
"3. The notices and subsequent proceedings under Section 19 are not on the record before us, but it is clear from what has been stated by the Board and by the High Court that the assessments that are under challenge were made upon the strength of the provisions of Section 19 of the State Act. The relevant portion of Section 19 reads thus:
"Where an assessment has been made under this Act or any Act repealed by Section 52 and if for any reason any sale or purchase of goods chargeable to tax under this Act or any Act repealed by Section 52 during any period has been under assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the date of order of assessment, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess...."
4. It is crystal clear therefrom that it applies only if an assessment has already been made and there has been under-assessment or escaped assessment therein. In a case where there has been no assessment, as in the case before us for the 24 assessment years in question, the provisions of Section 19 do not apply and cannot be invoked."
28. Mr. Vikram Sharma sought to distinguish the aforesaid judgment contending that in the aforesaid case, question of deemed assessment has not fallen for consideration and therefore, the aforesaid judgment is not applicable to the facts and circumstances of the case. The submission is without any merit. The question is what is the meaning to be ascribed to the "date of order of assessment" and "assessment or re-assessment of a dealer has been made" as appearing in Section 22 of the VAT Act. We are in accord with the view taken by the learned Single Judge. The provisions as noticed above make it abundantly clear that an assessment or re-assessment of a dealer had to be made by way of an order before exercise of powers under Section 22 of the VAT Act can be made, that too, within the period of five calendar years from the date of order of assessment. It is only in the event of passing an order, period of five calendar years, which is the limitation period, can be reckoned from the date of order of assessment. Invocation of Section 22 is permissible only when assessment of a dealer (a) has been under assessed or has escaped assessment or (b) has been assessed at a lower rate or (c) any wrong deduction has been made while making the assessment or (d) a rebate of input tax has incorrectly been allowed while making the assessment or (e) is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal, which has become final. The aforesaid 25 conditions precedent cannot be countenanced in absence of an order of assessment in writing and in that view of the matter, in respect of deemed assessment, recourse cannot be taken under Section 22 of the VAT Act.
29. Rule 20 under Chapter VI of VAT Rules, 2006 relates to "Returns". Rule 20(2)(d), on which reliance is placed by Mr. Sharma was inserted by notification dated 02.06.2011. Subsequently, by notification dated 21.10.2011, the words "in two copies" after the words "form 17-A" in Rule 20(2)(d) were inserted. Rule 20(2)(d) provides that after submission of electronic return, form 17-A in two copies be submitted along with copy of the challan of the tax deposited within thirty days in the relevant circle and acknowledgment has to be obtained. Rule 20(2)(e) provides that if the acknowledgment prescribed under clause (d) is not obtained, then it will be deemed that no return has been filed. Argument of Mr. Sharma that the date of acknowledgment of submission of electronic return is the date of the order of deemed assessment, and therefore, it is incorrect to say that there is no date of order of assessment, is misconceived. The acknowledgment obtained for submission of return cannot be construed to mean that the acknowledgment had resulted in an order of assessment.
30. In D. Saibaba (supra), in the context of commencement of the period of limitation for filing review petition, expression "date of that order" as occurring in Section 48AA of the Advocates Act, 1961, the Hon'ble Supreme Court observed that the same has to be construed 26 as meaning the date of communication or knowledge of the order to the review petitioner and that the knowledge, either actual or constructive, of the party affected by such a decision, is an essential element which must be satisfied before the decision can be brought into force. The above decision has no application in the facts of the case.
31. In MCD (supra), the Hon'ble Supreme Court had occasion to consider what is the meaning of the word "made". It was observed that the meaning of the word would depend upon its text and context as also the purport and object it seeks to achieve. It was also observed that if the intention or design of the statutory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent authority to make an order the date of exercise of that power and in the case of exercise of suo moto power over the subordinate authorities' orders, the date on which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this case also does not have any application to the facts of the present case.
32. In view of the above discussion, we find no merit in these appeals and accordingly, the writ appeals are dismissed. No cost.
Sd/- Sd/-
(Arup Kumar Goswami) (Parth Prateem Sahu)
Chief Justice Judge
Anu