2019 (8) TMI 1526 - HC - VAT and Sales Tax

Reopening of assessment - Section 33 of the Value Added Tax Act 2005 - Jurisdiction - power of Controller and Auditor General to raise audit objection - While submitting that the entire proceedings is de hors the statutory provisions of Section 33 of the Act and is fit to be struck down in view of the judgment of this Court in Tata Projects 2019 (3) TMI 1762 - PATNA HIGH COURT it is prayed for allowing the amendment to question the orders so passed. HELD THAT - Though an attempt is made by the respondent authorities in the Commercial Taxes Department to wriggle out of the judgment of Tata Projects (supra) but in our opinion the case is hopeless for on each of the two issues i.e lack of jurisdiction on the Accountant General to raise objection in a case of deemed assessment as well as on the failure of the Assessing officer to record satisfaction thereon that we find the entire proceedings de hors the statutory discharge as well as our opinion in Tata Projects (supra) and consequently the entire proceedings including the assessment order at Annexure- 8 of I.A. No.2 of 2019 together with demand notice at Annexure-6 to I.A. No. 1 of 2019 are quashed and set aside. Petition allowed.

Summary

Issues involved:
Challenge to notice for reopening assessment under Section 33 of the Value Added Tax Act, 2005 based on audit objection by Accountant General. Jurisdiction of Accountant General to raise audit objection in case of deemed assessment. Failure of Assessing officer to record satisfaction on objection raised. Belated filing of returns by the petitioner.

Analysis:
The writ petition challenges a notice issued by the Deputy Commissioner, State Taxes, Patna Circle Patna to reopen the assessment for the year 2012-13 based on an audit objection by the Accountant General. The petitioner argues that the Controller and Auditor General lacks jurisdiction to raise audit objections in cases of deemed assessment under Section 33 of the Act. The petitioner contends that the Assessing officer failed to record satisfaction before proceeding on the objection. The petitioner filed returns on 31.03.2013, and despite queries, no assessment order was passed. The final orders were issued on 6.05.2019, which were challenged through interlocutory applications.

The judgment in Tata Projects v. State of Bihar establishes that the Accountant General lacks jurisdiction to raise objections in cases of deemed assessment. The court held that the Assessing officer cannot mechanically proceed without recording satisfaction on the objection. The petitioner sought to amend the petition to challenge the orders passed. The court allowed the amendment and the interlocutory applications.

The respondent argued that the petitioner's returns were belatedly filed, thus not falling under deemed assessment jurisdiction. However, the court rejected this argument due to lack of supporting records and accepted the petitioner's statement of filing returns on 31.03.2013. The proceedings initiated based on the Accountant General's objection were found to be outside the statutory provisions of Section 33 of the Act.

Despite attempts by the respondent authorities to contest the Tata Projects judgment, the court found the case lacking on both issues: the Accountant General's jurisdiction and the Assessing officer's failure to record satisfaction. Consequently, the court quashed the assessment order and demand notice, setting aside the entire proceedings. The writ petition was allowed, and the records were directed to be returned to the department.