2007 (10) TMI 603 - AT - VAT and Sales Tax

Summary

Issues involved:
Challenge to provisional assessment order under the West Bengal Value Added Tax Act, 2003 for the quarter ended on December 31, 2006.

Analysis:
The case involved a challenge to a provisional assessment order passed by the Sales Tax Officer under the West Bengal Value Added Tax Act, 2003. The applicant, a company dealing in iron and steel goods, had failed to file the return for the quarter ending on December 31, 2006 due to financial constraints. The Sales Tax Officer issued a notice directing the applicant to submit the return, and upon submission, completed the provisional assessment, determining the gross turnover and imposing a penalty. The applicant challenged this order, arguing that the assessment was completed prematurely and without considering the request for an extension of time for tax payment. The Deputy Commissioner confirmed the order, leading to the appeal.

The applicant contended that the assessing authority should have considered only the relevant information for the quarter ending on December 31, 2006, and not the earlier returns. The applicant also argued that the assessing authority should have communicated its decision regarding the request for an extension of time for tax payment. The applicant cited judicial decisions to support the argument that when an application for extension is not rejected, the applicant can reasonably presume that the request was entertained.

The State Representative, on the other hand, argued that the applicant's request for an extension of time was not valid as it did not comply with the provisions of the VAT Act and Rules. The State Representative maintained that there was no scope for allowing any opportunity to the dealer during provisional assessment under the VAT Act.

After considering the arguments, the Tribunal found that the applicant had filed the return within the extended time and had requested an extension for tax payment. The Tribunal noted that there was no order rejecting the application for extension, and it appeared that the applicant was under the impression that the request was granted. The Tribunal also emphasized the importance of natural justice, stating that even though there was no provision for allowing opportunities during provisional assessment, the affected party should be given a chance to respond to adverse decisions. Therefore, the Tribunal set aside the orders of the Sales Tax Officer and Deputy Commissioner.

In conclusion, the Tribunal disposed of the application, setting aside the provisional assessment orders and emphasizing the importance of providing opportunities for affected parties to respond to adverse decisions, even in the absence of specific provisions in the Act.