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2023 (1) TMI 339 - HC - VAT and Sales TaxReopening of assessment - deemed assessment - whether the Respondent Authorities would have the power to reopen the assessment made without there being an assessment order, only accepting the deemed assessment made by the Assessee and treating it to be the assessment order? HELD THAT - As regards the factual aspect, whether there has been an assessment order as such passed under Section 22(1) of the VAT Act by the Authorities, it is not disputed by learned State Counsel. However, learned State Counsel only tried to justify their stand inasmuch as, an assessment order is not required and the deemed assessment submitted by the Petitioner under Section 21(1) of the VAT Act is good enough for reopening of assessment invoking Section 22 and the deemed assessment itself has to be considered and treated as an order of assessment. Given the submissions made by learned Counsels for parties, what is also required to be taken note of is, the fact that this very argument raised by learned State Counsel is one which has been dealt with extensively by the Division Bench while deciding the matter in M/S TATA TELESERVICES LIMITED VERSUS STATE OF CHHATTISGARH, COMMISSIONER, COMMERCIAL TAX, RAIPUR (C.G.) , COMMERCIAL TAX OFFICER, CIRCLE-5, RAIPUR (C.G.) 2018 (3) TMI 1416 - CHHATTISGARH HIGH COURT . This has further been followed by the Division Bench again in the aforementioned TAXC No.74/2022, reiterating the same stand earlier taken by the Division Bench. It has been emphatically held that unless there is a specific order of assessment under Section 21(1) passed by the Authorities concerned, there cannot be reopening of an assessment made under Section 21(2) of the VAT Act. Petition alowed.
Issues:
Challenge to Order dated 30.6.2016 and Order dated 12.7.2018 regarding deemed assessment and reopening of assessment under the Chhattisgarh Value Added Tax Act, 2005. Analysis: The main issue in the present Writ Petition is whether the Respondent Authorities have the power to reopen an assessment without a formal assessment order, solely relying on the deemed assessment submitted by the Assessee. The Petitioner argues that reopening an assessment is only permissible if there is a valid assessment order, as required under Section 21(1) of the VAT Act. The Petitioner contends that in this case, no assessment order was issued, and the Authorities proceeded to reopen the assessment based on the deemed assessment submitted by the Petitioner. The High Court notes that this issue has been previously addressed in several Writ Petitions where the Single Bench and Division Bench of the High Court allowed challenges against reopening assessments without a formal assessment order. The Division Bench specifically highlighted the requirement of an "order of assessment" as a condition precedent for invoking Section 22(1) of the VAT Act. The Court emphasized that the limitation period of five years for reassessment can only be counted from the date of a formal assessment order. The Court referred to specific judgments where it was established that for the Authorities to exercise powers under Section 22 of the VAT Act, there must be a written assessment or reassessment order. The Court clarified that in the absence of a formal assessment order, the conditions precedent for reassessment cannot be met, especially in cases of deemed assessments under Section 21(2) of the VAT Act. Additionally, the Court mentioned a similar case disposed of by the Division Bench in line with the principles established in previous judgments. The State Counsel argued that an assessment order is not necessary, and a deemed assessment suffices for reopening assessments under Section 22. However, the Court reiterated that without a specific assessment order under Section 21(1), reopening assessments made under Section 21(2) is not permissible. Given the extensive legal precedents set by the Division Bench and Single Bench on this issue, the Court decided to allow the present Writ Petition, setting aside the Orders dated 30.6.2016 and 12.7.2018. The Court emphasized the importance of a formal assessment order before initiating reassessment proceedings under the VAT Act. In conclusion, the Writ Petition was allowed and disposed of accordingly, based on the established legal principles regarding the necessity of a formal assessment order for reopening assessments under the Chhattisgarh Value Added Tax Act, 2005.
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