9911796707
TMI Blog1997 (4) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, returns furnished in accordance with the provisions of sub-section (3) of section 10 by a registered dealer in respect of the year or years comprising period or periods commencing on and from the day immediately following the latest year or part of a year comprising period or periods for which assessment under subsection (1) of section 11 has been made or deemed to have been made under section 11E and ending on or before the 31st day of December, 1992 (hereinafter referred to as the eligible period ) shall be accepted as correct and complete and all assessments in respect of such eligible period shall, subject to the provisions of sub-section (2), be deemed to have been made on the 30th day of June, 1993: Provided that on the failure of any dealer to furnish any return for any period of a year, the provisions for assessment of tax under this sub-section for other period or periods of that year shall, notwithstanding that returns have been furnished by such dealer for such period or periods of that year, not be applicable: Provided further that where any assessment made under sub-section (1) of section 11 in respect of any of the eligible periods has been set aside under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (1) of section 11E, such dealer shall checkup that the figures shown in the returns for the period of assessment are in agreement with those as per books of accounts and relevant documents and his claims for sales at the concessional rate of tax or exemption from tax are supported by statutory declarations and other documents, and if he finds any discrepancy in this regard which has the effect of increasing the amount of tax payable by him during such period over the amount of tax already paid by him as per returns for such period, he shall pay the balance amount of tax which is found to be payable by him under the Act and should furnish a declaration, as far as practicable in Form III or Form IIIA, as the case may be, referred to in rule 26 or rule 26A within the 31st day of December, 1995. 3.. The application appears to be unnecessarily lengthy (149 pages plus 94 pages of annexures) and the contentions are not properly arranged. As far as possible, we summarise below the material contentions of the applicants: Applicant No. 1 is a company incorporated under the Indian Companies Act, 1913 and applicant No. 2 is a shareholder of that company as well as a citizen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Commissioners), but in vain. Respondent No. 3 advised that the company should quantify and pay the difference of tax in instalments to be granted upon application and only then permits and declaration forms could be issued or revalidated. This he did, despite submission to the effect that applicant No. 1 was not required to do so, because there was no error or omission resulting in short payment of tax. On account of want of permit the truck which was transporting steel and was waiting at Chirkunda at West Bengal-Bihar border, was diverted to the factory at Jamshedpur merely for storage, as that steel could not be utilised in the Jamshedpur factory which was manufacturing different products. Applicant No. 1 paid detention charge of the truck amounting to Rs. 5,620 to satisfy the claim of the transporter. Those goods are required to be transported again to the factory in West Bengal from Jamshedpur at a further cost. Similar other consignments of steel are held up for want of permits. Refusal to issue permits is causing undue hardship, financial loss as well as loss of credit and reputation. Applicant No. 1 is thus prevented from executing orders placed by its customers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Constitution. Before refusal to issue permits in form 42, no reasonable opportunity of hearing was given to applicant No. 1. A petition dated February 5, 1996 was filed before respondent No. 4, Commissioner of Commercial Taxes, on behalf of the Commercial Taxes Bar Association protesting against refusal to accept applications for permits and declaration forms. Applicant No. 1 prays for reimbursement of Rs. 5,592 paid as demurrage charges to the transporter, Adarsh Parivahan and Rs. 20,000 as transportation charges. Rule 54A is allegedly a draconian measure causing undue hardship to applicant No. 1 and many other dealers who have failed to collect declaration forms within December 31, 1995. This rule is beyond the rule-making power in section 26. The contention of the applicants is that rule 54A does not lay down the proposition that difference of tax should be paid on declaration forms which were not received up to December 31, 1995. Rule 54A is said to be ultra vires the Act of 1941 and violative of article 245(1) of the Constitution. In any event, it is said to be merely directory. 5.. Applicants have contended that since the returns were accepted as correct and complete, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of tax in terms of rule 54A has been continuing. 7.. The case of respondents Nos. 1 to 5 in their affidavit-in-opposition is that after December 26, 1995 applicants did not apply for permits to the prescribed authority in the appropriate manner and form. The application for declaration forms made on March 1, 1996 could not be disposed of, as the applicants did not satisfy respondent No. 1 about bona fide requirements of declaration forms and bona fide use of such forms which were issued on the last two occasions. Applicants were never denied declaration forms or permits on the ground of failure to furnish revised returns for the eligible period. It is denied that applicants made any application on January 29, 1996 or January 31, 1996 for blank permits or that respondent No. 1 declined to accept such application on the ground that revised returns for the periods 1989-90, 1990-91 and 1991-92 were not filed under section 11E(3). It is also denied that respondent No. 1 declined to revalidate one blank permit No. 039313B. It will appear from averments made in paragraph 17 of the main application that the applicants did not file any application on February 5, 1996. Application for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to check if his claim for concessional rate of tax or exemption from tax was supported by statutory declaration obtained from his purchasing dealers, and after such checking, if he finds that any amount of tax is payable, he is required to furnish a revised return after paying the required amount of tax by December 31, 1995. Several allegations including the allegation that respondent No. 1 did not issue declaration forms within December 31, 1995 is denied. In terms of circular letter No. 5164 (250), adequate number of declaration forms was issued to dealers according to law. Where no application for declaration forms was made or requirements of law were not complied with, the Commissioner s circular letter was of no help. While dealing with the provisions of section 11E, respondents point out that reopening of deemed assessment under section 11E(2) is subject to fulfilment of certain conditions and restrictions. Sub-section (3) of section 11 provides for imposition of penalty, but the proviso to it lays down that there may be exemption from penalty, if a dealer pays balance of tax after finding out that certain errors or omissions had been committed in the returns previously f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutional or otherwise invalidity of rule 54A are denied. The State Government is empowered by section 26(2)(ii-1) to prescribe a form of declaration referred to in section 11E(3). Rule 54A makes the provision in proviso to section 11E(3) more elaborate. A selling dealer is competent to recover appropriate tax from a purchasing dealer where the latter fails to furnish declaration form. Respondents have refuted the applicants contention that once deemed assessments are made under section 11E(1) by treating the returns as correct and complete, it is not possible to make fresh assessment by reopening it. The provisions for penalties leviable under section 11(1) for non-filing of return in due time, under section 20A for concealment of sales and incorrect statements and particulars, and under section 11E(3) for non-filing of declarations in form III or IIIA are distinguished from one another. It is stated that the question raised by applicants needs no decision of this Tribunal, because applicants are not yet aggrieved, since no penalty has been imposed. The period of limitation of six years for reopening under section 11E(2) is in conformity with the same length of limitation for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition. It will appear from the submissions of the learned advocate for the respondents recorded in the order of this Tribunal dated March 26, 1996 that, according to respondents, the application of permits said to have been refused was not submitted at all and as regards the application for declaration forms, the stand taken by respondents was that the applicant was asked to satisfy on the bona fide use of declaration forms previously issued and bona fide requirement of declaration forms wanted. By the interim order dated March 26, 1996 respondents 1 to 5 were directed to dispose of, by reasoned order in writing, application for permit within a week from the date of filing of the same. They were directed also to dispose of the pending application for declaration forms according to law within two weeks. Applicants were directed to produce documents before the appropriate officer to satisfy him about bona fide use of declaration forms earlier issued and bona fide requirement of declaration forms wanted. It has been stated in the written argument on behalf of the applicants that subsequent to the interim order respondent No. 1 issued declaration forms for the years 1992-93 onwards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the prescribed form together with a receipted challan showing payment of the balance amount of tax within December 31, 1995. 12.. Mr. Kothari, learned advocate for the applicants, contended that rule 54A is ultra vires the proviso to section 11E(3). But it will appear from the proviso itself that the Legislature fixed the date December 31, 1995, within which the actions contemplated in the proviso are to be taken by the assessee. The same date has been stated in rule 54A. Therefore, at least in respect of the last date for taking the required actions on the part of an assessee, rule 54A is in full conformity with the proviso to section 11E(3). 13.. At this stage it is perhaps necessary to dispose of the contention of the applicants that the date is arbitrary and unreasonable. It will appear from section 11E(1) that deemed assessments were to be made as on June 30, 1993. So, by the impugned proviso to section 11E(3) and the impugned rule 54A, the Legislature adopted a date for the desired actions to be taken by an assessee within December 31, 1995 or two years and a half from June 30, 1993. The basic contention of applicants in this respect is that this period is not suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licants that fixation of December 31, 1995 as the last date for the contemplated actions is arbitrary or unreasonable is not valid. It is up to an assessee to activate himself and to abide the time-limit fixed by the Legislature, if he likes to avail of the exemption from possible penalty under the proviso to section 11E(3). 14.. It has been contended on behalf of applicants that rule 54A speaks of self-verification not only with reference to books of account, but also relevant documents and statutory declaration forms, but in the substantive provision, namely, the proviso to section 11E(3) there is no mention of either declaration forms or documents other than books of account. It is argued that, to this extent, rule 54A travels beyond the scope and ambit of proviso to section 11E(3). Several cases have been referred to in the written argument on behalf of applicants on the point that a rule cannot be validly prescribed beyond the scope and ambit of the substantive provision under which it is framed. It is true, as already seen, the proviso to section 11E(3) does not expressly refer to declaration forms or other documents, but it clearly contemplates that an assessee may avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of a form of declaration under section 11E(3). That is laid down in item (ii-1) of sub-section (2) of section 26. But sub-section (1) of section 26 which generally delegates the power to make rules to the State Government for carrying out the purposes of the Act is not meaningless. Making of rule 54A in conformity with the proviso to section 11E(3) for carrying out the purposes of that proviso is well within the ambit of section 26(1). It is not merely a redundant provision. 16.. The other branch of contentions of the applicants is that rule 54A or the proviso to section 11E(3) cannot be invoked for the purpose of disposing of applications for sales tax permits and declaration forms, or for renewal of such permits and forms. There is substance in this submission. Mr. K.K. Saha, learned advocate for respondents 1 to 5, conceded that a direction may be given by us that rule 54A will not be applied unless action is taken in terms of section 11E(2). The legal position is clear that in a case where a deemed assessment will be reopened (here not yet reopened) under section 11E(2) there should be a de novo regular assessment under section 11(1). Once such a regular assessment is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed any application in form 42, and reference was made in this connection to paragraph 17 of the main application. It actually appears from paragraph 17 that admittedly no application for permit was filed on February 5, 1996. Annexure F at pages 16 to 18 is said to be a copy of the petition for permit dated February 5, 1996 which was intended to be filed, but was not actually filed on the volition of the applicants or their advocate. That being so, any charges incurred by the applicants for detention of the truck at the border of the State or for transportation of the goods from the border to Jamshedpur cannot be related to refusal to issue permit for the particular consignment. May be, respondent No. 1 was not in a mood to generally issue permits for importation of such consignments. But in order to succeed in a claim for compensation, it must be shown that any loss was incurred on account of refusal to issue a particular permit. Since the application for permit was not filed (it is not a question of refusal to accept), it cannot be said that the charges incurred by the applicants are reimbursible from respondents 1 to 5. Moreover, while in paragraph 69 of the main applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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