9911796707
TMI Blog2013 (5) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi Value Added Tax (Second Amendment) Act, 2011. 2. In respect of W.P.(C) No.2763/2013, the relevant period is the financial year 2010-2011 whereas in W.P.(C) No.2766/2013, the relevant period is the financial year 2008-2009. In so far as W.P.(C) No.2763/2013 is concerned, the petitioner had filed returns on a monthly basis under the assessment procedure provided in Section 31 of the said Act. Subsequently, the Value Added Tax Officer passed 12 separate default assessment orders for each month of the financial year 2010-2011 on 26.12.2012. By virtue of the said default assessment orders an additional tax demand of Rs. 83,20,595/- was raised. The interest amount was also computed at Rs. 25,43,571/- and, therefore, the disputed tax amount along with interest thereon was computed at Rs. 1,08,64,166/-. In addition, penalties were also imposed totaling to Rs. 89,17,873/-. Since the petitioner was dissatisfied with the default assessment orders, the petitioner filed objections under Section 74 of the said Act on 11.02.2013. As a pre-condition for hearing those objections, the Special Commissioner (the Objection Hearing Authority) by virtue of the impugned order dated 21.03.2013, as men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute under an assessment until the objection is resolved by the Commissioner, it did not mean that the Commissioner could not enforce the payment of the assessed tax and penalty before the objections were resolved. It was contended that even under Section 35(2), the Commissioner could ask for payment of the assessed tax and penalty. Therefore, according to the learned counsel for the respondents, nothing new as such has been added by the insertion of the 3rd proviso to Section 74(1) of the said Act. 5. It was contended in this situation that the two provisions of Section 35(2) and Section 74(1) of the said Act should be read harmoniously. And if it is so read, then, it would easily be seen that the requirement of making a deposit existed even prior to the insertion of the 3rd proviso to Section 74(1) of the said Act. 6. The second point urged on behalf of the respondents was that the relevant date for considering the applicability of the 3rd proviso to Section 74(1) of the said Act would not be the date of the return but would be the date of filing of the objections. In the present case, in both the writ petitions, the default assessment orders had been made after the amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or decision, as the case may be, to the Commissioner: PROVIDED that no objection may be made against a non-appealable order as defined in section 79 of this Act: PROVIDED FURTHER that no objection against an assessment shall be entertained unless the amount of tax, interest or penalty assessed that is not in dispute has been paid failing which the objection shall be deemed to have not been filed: PROVIDED ALSO that the Commissioner may, after giving to the dealer an opportunity of being heard, direct the dealer to deposit an amount deemed reasonable, out of the amount under dispute, before such objection is entertained: PROVIDED ALSO that only one objection may be made by the person against any assessment, decision or order: PROVIDED ALSO that in the case of an objection to an amended assessment, order, or decision, an objection may be made only to the portion amended: PROVIDED ALSO that no objection shall be made to the Commissioner against an order made under section 84 or section 85 of this Act if the Commissioner has not delegated his power under the said sections to other Value Added Tax authorities. (2) xxxx xxxx xxxx xxxx" (Underlining added) 9. A plain reading of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be regarded as a mere alteration in procedure. The Supreme Court, inter alia, observed as under:- "Finally, Sri Ganapathy Iyer faintly urges that until actual assessment there can be no "lis" and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a "lis" arises. It may be conceded, though not deciding it, that when the assessee files his return a "lis" may not immediately arise, for under Section 11(1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It will appear from the dates given above that in this case the "lis" in the sense explained above arose before the date of amendment of the section. Further, even if the " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vitthalbhai Naranbhai Patel (supra) a Constitution Bench of the Supreme Court noticed its earlier decision in Hoosein Kasam Dada (supra) and approvingly noted that the decision in Hoosein Kasam Dada's case proceeded on the ground that when a lis commences, all rights get crystallized and no clog upon a likely appeal can be put, unless the law was made retrospective expressly or by clear implication. However, on the facts of the case before it, the Supreme Court observed that, from the record of that case, they could not determine as to when the lis commenced and therefore, they could not conclusively state as to whether the lis had commenced before the amendment of the law and that the ruling in Hoosein Kasam Dada's case would or would not apply. However, the fact remains that the ruling in Hoosein Kasam Dada's case clearly implies that all the rights get crystallized on the date on which the lis commences. As we have noticed above, when a return is filed it may or may not result in a lis. In case the return is accepted, obviously there is no lis. However, when a return is not accepted, for whatever reason, there is a clear lis between the assessee and the revenue. In such a situa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition for having their objections heard. 18. As regards the submissions made by learned counsel for the respondents that nothing new was introduced by the 3rd proviso to Section 74(1) inasmuch as similar provisions were contained in Section 35(2) of the said Act, we fail to see how this can be an argument at all. This is so because the provisions of the Section 35(2) and the 3rd proviso of Section 74(1) of the said Act operate in entirely different fields. Section 35 deals with collection whereas Section 74 deals with objections. It is very clear that dehors the issue of collection of assessed tax and penalty under Section 35, the objections could be preferred and entertained by the Objection Hearing Authority under Section 74 of the said Act. However, because of the insertion of the 3rd proviso to Section 74(1) of the said Act, an impediment or a clog has been created in the right of a dealer in having his objections heard until and unless a deposit as directed by the Commissioner is made. While the collection of tax and penalty under Section 35 is not an impediment to the hearing of the objections, the requirement of making a deposit under the 3rd proviso of Section 74(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provisions clearly shows that enforcement of the demand under Sections 32 and 33 if made the subject matter of objection, is dependent upon the outcome of the objections and till the objections are decided, the disputed demand under Sections 32 and 33 is not to be enforced. Though undoubtedly the third proviso to Section 74(1) has now given a power to the Objection Hearing Authority to direct the disputed tax or penalty or any part thereof also to be deposited but the very fact that the second proviso as well as Section 35(2) have also been retained along therewith on the statute book is indicative of the invocation of the third proviso being only if the circumstances so demand and not in the usual course....." "23...... On the contrary a reading of Section 74(1) and Section 35 clearly shows that the liability for payment of the disputed demand under a best judgment assessment under Sections 32 & 33 arises only on the conclusion of objections and which as aforesaid is after the decision on objections and not prior thereto. That being the position, the question of the assessee, during the pendency of objections having the status of a defaulter and thereby suffering any disabi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
