2015 (6) TMI 376 - HC - VAT and Sales Tax

Validity of Reassessment proceedings - Incorrect return files - Held that - subsequent material, a declaration furnished by the petitioner itself under the statutory form 65A, disclose that the quantity and value of the goods were more than what were furnished in the return. Therefore there does not appear to be any reason to hold that the reassessment order is not based on the valid material which is found subsequent to the assessment. That apart the order is an appelable order. The petitioner has taken a shortcut method to file the writ petition bypassing the provisions of appeal and other remedies before invoking the writ jurisdiction under Article 227 of the Constitution of India. A false return has been filed on the basis of the contents of statutory form 65A which the department found subsequent to the assessment from the check-post in West Bengal. This clearly shows that the petitioner has with a dishonest intention filed false return to cause loss to the state revenue. If so, it amounts to commission of offence punishable under section 415, read with section 417 of the Indian Penal Code. The authorities should not remain complacent by invoking right of reassessment; they should also effectively prosecute the person who files a false return by filing a complaint, seek condonation of delay under section 468 of the Criminal Procedure Code if necessary to sternly deal with such cases of false and dishonest returns - Decided against assessee,

Summary

Issues:
1) Reassessment under section 40 of the Assam Value Added Tax Act, 2003 based on form 65A submission.
2) Interpretation of the provisions of section 40 of the Assam Value Added Tax Act, 2003.
3) Compliance with Rule 41(9)(iii) of the Assam Value Added Tax Rules, 2005 regarding submission of documents at the check-post.
4) Jurisdiction of the court in cases of reassessment and filing of false returns.

Analysis:
1) The petitioner engaged in inter-state trade in goods (jute) from Assam to West Bengal. A reassessment notice was issued under section 40 of the Assam Value Added Tax Act, 2003 based on the information from form 65A submitted at the check-post in West Bengal, showing a discrepancy in the quantity of goods compared to the return filed earlier. The petitioner challenged this reassessment.

2) The court referred to a previous case to interpret the provisions of section 40, emphasizing that for reassessment to be valid, the assessing authority must be satisfied that there is an escape of assessment based on information received subsequent to the original assessment order. The submission of form 65A, a statutory requirement for inter-state traders, constituted new material justifying the reassessment.

3) The petitioner argued compliance with Rule 41(9)(iii) of the Assam Value Added Tax Rules, 2005, stating that all necessary documents were submitted at the check-post, including the tax clearance certificate, invoice, consignment note, and transporter manifesto. However, the court found that the discrepancy revealed in form 65A superseded this argument, indicating a need for reassessment.

4) The court dismissed the petition, highlighting that the reassessment order was based on valid material found subsequent to the original assessment. It criticized the petitioner for filing a false return with dishonest intent to evade taxes, suggesting potential criminal liability under the Indian Penal Code. The court emphasized the importance of not only reassessing but also prosecuting individuals filing false returns to deter such behavior and protect state revenue. The dismissal of the petition underscored the need for proper legal recourse and action against dishonest practices.