Jammu & Kashmir High Court - Srinagar Bench
Mohammad Ramzan Paul vs Assessing Officer And Others on 30 June, 2021
Bench: Chief Justice, Sanjay Dhar
Sr. No.203
IN THE HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
(Through virtual Mode)
CJ Court
LPA No. 59/2020
Mohammad Ramzan Paul ...Petitioner(s)/Appellants.
Through: Mr. Zahoor Jan, Advocate.
Vs.
Assessing Officer and others. ....Respondent(s)
Through: Mr. D. C. Raina, Advocate General, with
Mr. Sajad Ashraf, GA.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
ORDER
30.06.2021
1. The appellant has come up in this appeal against the judgment and order dated 13.03.2020 passed by the learned Single Judge dismissing writ petition WP(C) No.772/2020 of the petitioner-appellant on the ground of alternate remedy.
2. Notice was issued to the respondents but despite deemed service as per the office report dated 28.01.2021, no response till date has been filed.
3. Heard Sh. Zahoor Jan, learned counsel for the appellant and Sh. D. C. Raina, learned Advocate General for the respondents.
4. The petitioner invoked the jurisdiction of the Writ Court for quashing of the assessment and penalty order dated 04.03.2019 passed by the Assessing LPA No.59/2020 1 Officer/ Assistant Labour Commissioner under the Building and Other Construction Workers' Welfare Cess Act, 1996. The petitioner-appellant also challenged the notice of demand dated 10.02.2020 issued by the Special Tehsildar Recoveries/ Assistant Collector 1st Class, Srinagar, so as to recover the assessed amount with penalty and interest.
5. The Writ Petition was disposed of on the ground that Section 11 of the Building and Other Construction Workers' Welfare Cess Act, 1996, (hereinafter referred to as an Act) provides for an appeal against the order of Assessment as well as against the order of penalty and, therefore, petitioner- appellant have an alternative statutory remedy available with him.
6. The submission of learned counsel for the petitioner-appellant is that the order impugned in the writ petition dated 04.03.2019 is a composite order of assessment and penalty which is not permissible under the Act as it is only after the assessment order when the person fails to deposit the cess in time that penalty can be imposed under Section 9 of the Act. Moreover, 1% cess on the cost of construction was deducted initially for which no credit has been given.
7. It appears that the petitioner-appellant got permission for the construction of a building at Nowgam Bye Pass, Srinagar, from the Srinagar Municipal Corporation (SMC) and 1% cess on the construction value amounting to Rs.2,28,384/- was got deposited at the initial stage in advance in accordance with Section 3(1) of the Act. The Joint Commissioner Planning, Srinagar Municipal Corporation, Srinagar, vide his letter dated 03.03.2020 accepted that the petitioner-appellant had deposited cess amount of Rs.2,28,384/- on 08.03.2017 as per the records.
LPA No.59/2020 2
8. The petitioner-appellant was served with the assessment order dated 04.03.2019 stating that he has incurred an expenditure of Rs. 1,5000000/- in the construction and, therefore, is liable to 1% cess amounting to Rs.1,50,000/- and an equal amount penalty with interest at the rate of 2% per month.
9. A perusal of the above order reveals that it is a composite order of assessment and penalty passed in exercise of power under Section 5 and Section 9 of the Act.
10. It is not an order of penalty passed under Section 12 of the Act as mentioned in the order. The penalty under Section 12 of the Act can be imposed where the person fails to furnish a return under the Act or knowingly furnishes any return which is false. Since the penalty has not been imposed on the ground of non furnishing of the return or filing false return rather on the ground of non-payment of the cess in time, it is an order of penalty passed under Section 9 of the Act.
11. Section 5 of the Act provides for the assessment of cess. It provides that the assessing authority before whom the return has been furnished after making such enquiry as he thinks fit and after satisfying himself that the particulars stated in the return are correct, by order, assess the amount of cess payable.
12. Section 9 provides for the penalty for non-payment of cess within the time specified. It envisages that if the amount of cess payable is not paid within the date specified in the order of assessment, the authority prescribed in this behalf may, after making such enquiry as it deems fit, impose a penalty not exceeding the amount of cess.
LPA No.59/2020 3
13. A reading of Section 5 and Section 9 of the Act together would reveal that first an order of assessment has to be passed specifying the date for payment of the cess and in case the cess is not paid or deposited within the time prescribed the authority prescribed can proceed for the imposition of the penalty. In other words, the above provisions contemplates passing of an assessment order and thereafter an order of penalty, if necessary. A composite order of assessment and penalty is not permissible in law.
14. Section 11 of the Act provides for an appeal against the order of assessment made under Section 5 or against an order imposing penalty under Section 9. Thus, apparently the petitioner-appellant had the remedy of appeal against the aforesaid assessment order/ penalty order by way of an appeal under Section 11 of the Act. Nonetheless, as the assessment order is exparte and the order of penalty has been passed without giving the petitioner- appellant an opportunity to deposit the cess simultaneously with the order of assessment, it is apparently an order without jurisdiction and in complete breach of the provisions of the law.
15. It may not be out of context to mention here that the petitioner- appellant has clearly demonstrated that he had already deposited a sum of Rs.2,28,384/- by way of cess at the initial stage and no adjustment of the same has been accorded while passing the impugned assessment order and the order of penalty.
16. The amount of cess assessed is only to the tune of Rs.1,50,000/- which apparently stood deposited and as such there appears to be no justification for imposing penalty rather the petitioner-appellant would be entitled to refund. LPA No.59/2020 4
17. Accordingly, we not only set-aside the judgment and order of the Single Judge dated 13.03.2020 but also quash the order dated 04.03.2019 which assesses the cess payable by the petitioner-appellant and imposed equivalent amount of penalty to be recovered with 2% interest with liberty to the assessing authority to proceed afresh after giving notice to the petitioner- appellant to pass an assessment order, if necessary, or even to impose penalty in accordance with law.
18. The appeal as well as the writ petition stands allowed.
(SANJAY DHAR) (PANKAJ MITHAL)
JUDGE CHIEF JUSTICE
Srinagar
30.06.2021
Abdul Qayoom, PS
LPA No.59/2020 5
ABDUL QAYOOM LONE
2021.07.01 11:46
I attest to the accuracy and
integrity of this document