2017 (9) TMI 1735 - HC - VAT and Sales Tax

Appealable Order - Section 46 of the Act 2002 and Entry Tax Act of 1976 - the petitioner has circumvented the statutory stipulation contained under section 46 of the Act of 2002 read with Section 13 of 1976 Act, on the contention that the impugned order is contrary to the provisions of section 20-A (1-B) of the Act of 2002 read with section 13 of 1976 Act and barred by time as fixed under sub-section (7) of section 20 of 2002 Act - grant of Input tax Rebate - pre-deposit - violation of Section 20A (1B) of 2002 Act - Deemed Assessment. Held that - In the present case, evidently the petitioner availed the benefit under Deemed Assessment Scheme for the Assessment period 2014-15 which was accepted with carried forward Input-tax rebate ₹ 1346886/- for the year 2015-16, by order dated 27/07/2016, brought on record as Annexure P/2 - the rebate of Input Tax under sub-section (1) of Section 14 subject to sub-section (5) thereof, is allowed on being claimed in the circumstances which find mention in clauses (a) and (b) of sub-section (1) of Section 14. We are not commended at any provision which stipulates that with the acceptance of the application under Deemed Assessment Scheme, the registered dealer is exonerated from all other provisions contained under Section 20 of 2002 Act. The Legal fiction attached to assessment under the Scheme that it is treated as assessment under sub-section (1) of Section 20, cannot be extended beyond the purpose for which it is created or beyond the language of Section by which it is created - the applicability of the provision of Section 20 of 2002 Act is thus not waived. It was within the competence of the Competent Authority to have exercised its jurisdiction under Section 20(5) of the Act of 2002. And since the order has been passed within the extended time period, we perceive no jurisdictional error as would give right to the petitioner to invoke extraordinary jurisdiction under Article 226 of the Constitution of India. The petitioner is relegated to avail the remedy of appeal under section 46 of 2002 Act read with 13 of 1976 Act - Petition disposed off.

Issues:
1. Challenge to order dated 18.1.2017 by Assistant Commissioner, Commercial Tax Department.
2. Interpretation of powers under Section 20(5) of Madhya Pradesh Value Added Tax Act 2002 and Section 13 of Entry Tax Act 1976.
3. Appeal process under Section 46 of the Act 2002 and Entry Tax Act 1976.
4. Application of Deemed Assessment Scheme for registered dealers.
5. Exoneration from provisions of Section 20 of Act 2002 under Deemed Assessment Scheme.
6. Legal fiction in assessment under Deemed Assessment Scheme.
7. Competence of Competent Authority under Section 20(5) of Act 2002.
8. Antedating of impugned order for limitation period.
9. Disposal of petition and remedy of appeal under relevant Acts.

Analysis:

1. The judgment concerns a challenge to an order dated 18.1.2017 by the Assistant Commissioner, Commercial Tax Department, Gwalior. The impugned order was passed under the powers of Section 20(5) of the Madhya Pradesh Value Added Tax Act 2002 and Section 13 of the Entry Tax Act 1976.

2. Section 20(5) of the VAT Act empowers the Competent Authority to assess a dealer to the best of their judgment in various scenarios, including failure to furnish returns, incomplete or incorrect returns, or non-maintenance of proper accounts. The appeal process against such orders is outlined in Section 46 of the Act 2002, requiring a specified pre-deposit for admission of appeals.

3. The case involves the application of the Deemed Assessment Scheme for registered dealers for the year 2014-15. The scheme outlined criteria for eligibility, including annual turnover limits and exclusion criteria related to tax evasion or pending assessments.

4. The petitioner contended that acceptance under the Deemed Assessment Scheme should exempt them from other provisions of Section 20 of the Act 2002. However, the court held that the legal fiction in the scheme's assessment does not absolve dealers from complying with other statutory provisions.

5. The judgment emphasized that legal fictions, like those in the Deemed Assessment Scheme, must be interpreted within the scope intended by the legislature and not extended beyond their purpose. The court cited various legal precedents to support this principle.

6. The Competent Authority's jurisdiction under Section 20(5) of the Act 2002 was deemed valid, and the order passed within the extended time period was upheld as not suffering from jurisdictional errors justifying extraordinary intervention under Article 226 of the Constitution.

7. Regarding the contention of antedating the impugned order, the court deferred the decision to the First Appellate Authority for adjudication along with other merits, declining to intervene and emphasizing the importance of the appeal process.

8. Ultimately, the petitioner was directed to pursue the remedy of appeal under Section 46 of the Act 2002 and Section 13 of the 1976 Act, with the Appellate Authority instructed to consider the appeal on its merits within the specified timeframe.

This comprehensive analysis covers the issues raised in the judgment, detailing the legal interpretations and decisions made by the court in each aspect of the case.

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