2000 (6) TMI 783 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of the order reopening deemed assessments.
2. Jurisdiction to issue reopening orders under different Acts.
3. Compliance with principles of natural justice.
4. Grounds for reopening deemed assessments.

Detailed Analysis:

1. Validity of the order reopening deemed assessments:
The applicant challenged the validity of the order passed by the Deputy Commissioner, Commercial Taxes, Durgapur Circle, reopening the deemed assessments for four periods under section 9A(2) of the West Bengal Sales Tax Act, 1954. The applicant argued that the notices for reopening were issued under section 11(E) of the Bengal Finance (Sales Tax) Act, 1941, but the final orders were under section 9A(2) of the 1954 Act. The applicant contended that no notice for reopening under the 1954 Act was received, thus questioning the jurisdiction assumed by the respondent to issue the orders under the 1954 Act.

2. Jurisdiction to issue reopening orders under different Acts:
The applicant argued that the initiation of proceedings was not done under rule 22AA(1) of the West Bengal Sales Tax Rules, 1954, and hence, the respondent had no jurisdiction to issue the orders under the 1954 Act. The respondent, however, contended that the mistake in issuing the notice under the 1941 Act instead of the 1954 Act did not void the proceedings. The respondent argued that the purpose of the notice was to inform the assessee of the intention to reopen deemed assessments, which was served, and that the applicant had submitted to the jurisdiction by appearing before the respondent.

3. Compliance with principles of natural justice:
The applicant argued that the notices for showing cause did not specify the reasons for reopening the deemed assessments, thus violating the principles of natural justice. The applicant cited judgments to support the contention that without knowing the reason, proper cause could not be shown. The respondent countered that the applicant, by appearing before the respondent, had the opportunity to know the correct Act and section under which the reopening was proposed, and thus no principle of natural justice was violated.

4. Grounds for reopening deemed assessments:
The applicant argued that the returns submitted had the columns for turnover tax left blank, making the return a truncated one, and thus there was no deemed assessment to reopen. The respondent argued that the gross turnover was mentioned, and the applicant had furnished incorrect particulars about sales liable to turnover tax. The respondent emphasized that the reopening was based on furnishing incorrect particulars, not non-payment of turnover tax.

Conclusion:
The tribunal found that the applicant was unaware that deemed assessments were proposed to be reopened under the 1954 Act until receiving the orders dated October 9, 1998. This lack of notice violated the principles of natural justice and rule 22AA of the 1954 Rules. Consequently, the orders reopening the deemed assessments were struck down. The tribunal did not find it necessary to address other issues raised, such as the correctness of the returns or concealment of sales. The application was allowed, and the orders dated October 9, 1998, reopening the deemed assessments for the four periods, were set aside. The application was disposed of without any order regarding costs.