9911796707
TMI Blog1998 (5) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... 1941 (in short, the 1941 Rules ) have not been complied with by the assessee. 2.. The applicant carries on a business of manufacture and sale of footwears in the name of a partnership firm called Joylakshmi Supply Corporation and is a registered dealer under the 1941 Act. Returns were filed under section 10 for the period of four quarters ending March 31, 1991, March 31, 1990, March 31, 1989 and March 31, 1992, respectively (RN-97, 98, 99 and 101 of 1998). The applicant s case is that in terms of section 11E assessments for the aforesaid periods were deemed to have been completed by operation of law. On January 30, 1997 the applicant received notices from respondent No. 2, Deputy Commissioner of Commercial Taxes, South Circle, asking him to appear on February 11, 1997 and to show cause why the deemed assessments should not be reopened, and why fresh assessments and other proceedings should not be started under section 11E(2) read with rule 54A, because the applicant concealed sales and particulars thereof and/or furnished incorrect statement of turnover or incorrect particulars of sales in the returns. At the time of hearing before the Deputy Commissioner a written objection wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale or furnishing of incorrect particulars of sale. The same contentions are also made in respect of section 9A of the West Bengal Sales Tax Act, 1954 (in short, the 1954 Act ). The applicant s further contention (paragraph 22) is that the mandatory provision of penalty is contrary to the principles laid down in the case of Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC) and the case of Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 (SC). Rule 54A (paragraph 23) is also alleged to be ultra vires section 11E, since it is beyond the scope of that section. Certain contentions have been made in paragraph 24 with regard to reopening of deemed assessments under the Central Sales Tax Act, 1956, but this Tribunal does not exercise jurisdiction over assessment of tax under the Central Sales Tax Act, 1956. In paragraph 26, the case of the applicant is that section 11E imposes an unreasonable restriction on law-abiding dealers, whereas defaulting dealers are left out of the purview of the mischief of section 11E. This discrimination is said to be unreasonable. Several other contentions have been made in respect of section 11E. Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on must also have a rational nexus with the object of the Act. Section 11E was undisputedly enacted with the object of disposal of huge number of pending assessment cases and at the same time to relieve honest dealers of the long wait for assessment hearings. Honest dealers are those who filed correct and complete returns according to law and paid taxes according to returns. Mr. Mookerji appearing for the applicant referred to the objects and reasons of the amendment Bill by which section 11E was introduced. The said objects and reasons indicated that reopening of deemed assessment should be made where evasion of tax would be detected (vide paragraph 25). Therefore, the classification of dealers into two groups, only one group being governed by section 11E, is constitutionally valid and does not contravene article 14. If in any particular case, the provision is misused or wrongly applied, such aberration can be corrected by statutory remedies and judicial review, but aberrations cannot make section 11E ultra vires the Constitution. The contention that those dealers who are not governed by section 11E get the advantage of post-assessment stages for production of declaration forms fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete, but the necessary declaration forms to support such claims have not been collected. His contention was that non-collection of declaration forms does not attract either clause (a) or clause (b) of section 11E(2). Mr. Mookerji further argued that since in a case under section 11E(1) there is no pre-condition of collection of declaration forms for getting the benefit of section 5(1)(aa) or 5(1)(bb). Non-collection of such forms cannot attract section 11E(2). Mr. K.K. Saha, learned Advocate for the respondents, relied on the proviso to section 11E(3) and rule 54A and submitted that upon a conjoint reading of those provisions it should be held that the situation argued by Mr. Mookerji clearly attracts section 11E(2) and hence, impugned orders dated March 26, 1997 and December 29, 1997 for the respective periods of assessment deserved to be upheld. 6.. The scheme of assessment of tax under the 1941 Act is to be found in section 11(1) and (2). Section 11(1) contemplates assessment in two types of cases: (i) where no returns are furnished by a registered or certified dealer or (ii) where the Commissioner is not satisfied that the returns furnished are correct and complete. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 per cent of the tax not paid. According to him, such mandatory high rate of penalty is contrary to decisions in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211 (SC) and Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 45 STC 197 (SC). This contention really concerns a case where penalty is imposed contrary to the said decisions of the Supreme Court. If such imposition of penalty is challenged on that ground, the court will decide the issue. 8. But Mr. Mookerji contended also that as far as the power to reopen a deemed assessment is concerned, it is to be found from section 11E(2), and that provision does not envisage reopening on account of non-collection of declaration forms in support of claims under section 5(1)(aa) or 5(1)(bb) in the returns furnished. Let us now appreciate the dispute. The applicant claimed in the return the concessions available under section 5(1)(aa) or 5(1)(bb) subject to production of declaration forms at the time of assessment or at the appellate or revisional stage in special cases, as per the provisos to section 5(1)(aa) and 5(1)(bb) and rule 27A(9) of the Bengal Sales Tax Rules, 1941. But on the date of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re itself circumscribed the effect of legal fiction by laying down that it would be subject to the provisions of sub-section (2) . The facts being as above, the assessment, whether after verification or not, took place on June 30, 1993. That itself presupposes that the applicant was required to furnish, if asked, the declarations on June 30, 1993 at the time of deemed assessment. That apart, reference may be made to the proviso to section 11E(3). That proviso confers the power to impose penalty where a dealer does not deposit short payment of tax by December 31, 1995 after discovering omission or error or other facts resulting in such short payment. Therefore, the said proviso necessarily implies a duty on the part of an assessee, whose returns have been accepted as correct and complete and in whose case deemed assessment has taken place under section 11E(1), to check his own books of account and documents and to see whether there has been any omission or error or other facts due to which tax has not been paid in full. The object of rule 54A is to implement the said proviso. That being the position, the applicant was required to be prepared to furnish the necessary declarations at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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