1999 (9) TMI 934 - AT - VAT and Sales Tax

Issues Involved:
1. Validity of the impugned notices for reopening deemed assessments for the periods ending March 31, 1991, and March 31, 1992.
2. Validity of the order dated June 3, 1999, reopening the deemed assessments.
3. Applicability of section 11E(2) of the Bengal Finance (Sales Tax) Act, 1941.
4. Validity of deemed assessments under section 11E(1) when returns were filed late.
5. Authority of different officers to issue notices and pass orders under section 11E(2).

Issue-wise Detailed Analysis:

1. Validity of the Impugned Notices:
The primary question was whether the notices dated September 11, 1998, for reopening deemed assessments were valid. The applicant argued that the notices were issued by one officer (Sri M.C. Poddar) based on a report by another officer (Sri D.K. Chakraborty), and the reopening orders were passed by a different officer (Sri B.L. Baski). The applicant challenged the validity of these notices, asserting that the officer who issued the notices did not pass the reopening orders, thereby questioning the necessary satisfaction under section 11E(2).

2. Validity of the Order Dated June 3, 1999:
The applicant contended that the orders dated June 3, 1999, reopening the deemed assessments, were invalid because they were not passed by the officer who issued the show cause notices. The applicant also argued that the findings in the report did not justify reopening the assessments for the period ending March 31, 1992, as the report lacked adverse findings for that period.

3. Applicability of Section 11E(2):
The applicant argued that section 11E(2) could not be applied to the periods in question because the returns were filed late, beyond the prescribed dates. The applicant asserted that deemed assessments under section 11E(1) could only be made if returns were filed within the prescribed dates.

4. Validity of Deemed Assessments under Section 11E(1):
The applicant claimed that the deemed assessments for the period ending March 31, 1991, were invalid because an initial proceeding for assessment under section 11(1) had been started for that period. The applicant argued that such deemed assessments could not be valid under section 11E(1).

5. Authority of Different Officers:
The applicant challenged the authority of different officers to issue notices and pass orders under section 11E(2), arguing that the officer who issued the show cause notice did not pass the reopening order, thus questioning the validity of the entire process.

Judgment Analysis:

1. Validity of the Impugned Notices:
The Tribunal held that the notices dated September 11, 1998, were valid and lawful. The notices were issued based on the prima facie satisfaction derived from the report of Sri D.K. Chakraborty, Deputy Commissioner. The Tribunal found no legal infirmity in passing the impugned orders by a different officer, as the satisfaction was objective and based on a written report.

2. Validity of the Order Dated June 3, 1999:
The Tribunal found that the order dated June 3, 1999, for the period ending March 31, 1992, was without foundation as the report relied upon did not ascertain the amount of unpaid tax due to missing documents. Therefore, the application for RN-256 of 1999 was allowed, and the order for that period was set aside.

3. Applicability of Section 11E(2):
The Tribunal rejected the applicant's contention that section 11E(2) could not be applied due to late filing of returns. The Tribunal held that section 11E(1) and section 10(3) did not emphasize the condition of furnishing returns by the prescribed dates. The Tribunal accepted the State's argument that late returns are not non-existent returns, and section 11E(1) was correctly applied.

4. Validity of Deemed Assessments under Section 11E(1):
The Tribunal held that section 11E(1) was an overriding provision and correctly applied to the period ending March 31, 1991. The initiation of the proceeding under section 11(1) was superseded by section 11E(1), and the assessment for that period was rightly deemed to have been made.

5. Authority of Different Officers:
The Tribunal found that the satisfaction required under section 11E(2) was objective and could be continued by a successor-in-office. The Tribunal held that the statutory proceeding could not lapse due to the unavailability of the officer who initiated it. The Tribunal concluded that Sri B.L. Baski, by reopening the deemed assessment, indicated that he concurred with the satisfaction of his predecessor.

Conclusion:
The application in RN-255 of 1999 was dismissed, and the application in RN-256 of 1999 was allowed, setting aside the order dated June 3, 1999, for the period ending March 31, 1992. No order was made for costs.

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