9911796707
TMI Blog2014 (5) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... Brief facts of the case as emerge from writ petition are; M/s Barfani Contractors Private Limited (hereinafter referred to as the Company) is a registered company. The Company was also registered under the U.P. Value Added Tax Act, 2008 and under the Central Sales Tax Act. The Assistant Collector, Commercial Tax passed provisional assessment order on 3rd November, 2010 for the period April, 2010 to August, 2010 assessing the Company and issued demand for tax and interest. The demand notice to the tune of Rs. 35,17,819/- was issued by the Deputy Commissioner, Commercial Tax. The Company filed an appeal against the provisional assessment order. The first appellate authority stayed 70% of the disputed amount by directing the Company to deposit 30% of the disputed amount. The Company feeling aggrieved by the appellate order dated 22nd January, 2011, filed a second appeal before the Commercial Tax Tribunal. The Tribunal vide order dated 3rd March, 2011 stayed realisation of 95% of the disputed tax subject to condition that the Company shall furnish adequate security for the stayed amount to the satisfaction of the assessing authority. In pursuance of the order of the Tribunal dated 3rd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which had come to an end after passing of the final assessment order. It is submitted that Tribunal has also subsequently dismissed the second appeal noticing the final assessment order. Thus the security/sureties given by the petitioners stood discharged and the recovery notice as well as the citation are not enforceable against the petitioners. Learned counsel for the petitioners in support of his submission, has placed reliance on two judgments of this Court in the cases of M/s. Dass Industries, Deoband, Saharanpur vs. Commissioner of Sales Tax reported in 1988 U.P.T.C. 641 and Commissioner of Sales Tax vs. M/s. Rahul Traders, Kanpur reported in 1994 U.P.T.C. 1035 as well as on a judgement of the Apex Court in the case of State of Maharashtra vs. Dr. M.N. Kaul (dead) by his legal representatives and another reported in A.I.R. 1967 SC 1634. Sri U.K. Pandey, learned Standing Counsel, refuting the submissions of learned counsel for the petitioners, contends that by passing the final assessment order provisional assessment order is not wiped out, rather provisional assessment order merges with final assessment order as per Section 28(8) of the U.P. Value Added Tax, 2008 and the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood vacated or discharged holding no tax liability of the Company. The submissions raised by learned counsel for the parties thus have to be examined in context of the facts of the present case. The submission, which has been much pressed by learned counsel for the petitioners, is that in view of final assessment order, provisional assessment order shall stand wiped out/discharged and is non est and thus any demand raised in pursuance of provisional assessment order shall also come to an end and cannot be enforced against the petitioners. The issue to be answered is as to whether on passing of the final assessment order, the provisional assessment order is discharged including the liabilities created under the provisional assessment order, if any. As noticed above, the 2008 Act specifically contemplates assessment of tax for a tax period under Section 25 whereas Section 26 deals with assessment of tax for an assessment year. Section 28(8) is as follows:- "28. Assessment of tax after examination of Records: (1)...... (8). Assessing authority shall not be precluded from making assessment order under this section on the ground of passing of any provisional assessment order in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessee might place before such officer. The provisional assessment is in the nature of interim assessment and holds its validity till final assessment is made. It is intended to be just a provisional stop-gap assessment. The findings recorded in the provisional assessment, notwithstanding they are confirmed by the Appellate Authority, are subject to the final scrutiny and examination of the case, in the regular assessment proceedings. At the time of final assessment as observed earlier, the Assessing Officer is free to re-examine the entire material afresh, whether brought on record before or after the provisional assessment. Likewise, all the explanations, given by the assessee are entitled to fresh consideration at the hands of the Assessing Authority. There is no substance in the argument that at the time of final assessment, because of any findings recorded by the Sales Tax Tribunal, in the proceedings arising out of provisional assessment, the Sales Tax Officer would be debarred or handicapped to draw different conclusion, if so warranted by the evidence on record and otherwise justified in the eye of law." Another judgment, which is relied by learned counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year and in any case when proceedings for regular assessment are initiated. It was contended that no proceedings for realisation of the amount provisionally assessed can be taken after the year in question is over. The Division Bench noticed the contentions of the parties in the aforesaid case in following words:- "The learned counsel appearing for the petitioner contends that a provisional assessment order made under rule 41(3) of the Rules framed under the U.P. Sales Tax Act ceases to be operative at the close of the assessment year in respect of which the order was made. In any case, it ceases to be effective when the proceedings under rule 41(5) for regular assessment for the year in question are initiated. Accordingly, no proceedings for realisation of the amount provisionally assessed can be taken after the year in question is over and in any case it cannot be taken after the proceedings for the regular assessment in respect of the relevant year have been initiated. According to the learned counsel, Section 3 of the U. P. Sales Tax Act is the charging section. It makes the dealer liable to pay sales tax on the turnover of each assessment year. In other words, it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the dealer for the entire assessment year in question and that the amount of tax payable by him for the assessment year would be quantified after taking into consideration the turnover for the entire year. It is not provisional in the sense that the turnover for the period has been determined provisionally. In our opinion, the Rules do not contemplate determination of the turnover of a dealer for a particular period again and again, that is, once under Rule 41(3) and again under Rule 41(5). The rule contemplates that once the turnover for a particular period falling within a particular assessment year has been determined, the dealer has to pay the tax payable on such turnover and in case he does not pay the same, the Sales Tax Officer can recover it under Rule 41(6). Viewed in this light, the question of such determination of turnover and the liability for payment of tax thereon becoming ineffective on the assessment year coming to an end or because of initiation of proceedings for final assessment under Rule 41(5), does not arise." The aforesaid Division Bench judgment is fully applicable in the present case. In view of the proposition laid down by the Division Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioners has also referred to Sections 129, 133 and 135 of the Contract Act, 1872. Reference has been made to Illustration (c) as given under Section 129 of the Contract Act, 1872. Section 129 of the Contract Act deals with ''continuing guarantee'. Illustration (c) of Section 129 is quoted below:- "(c). A guarantee payment to B of the price of five sacks of flour to be delivered by B to C and to be paid for in a month. B delivers five sacks to C. C pays for them. Afterwards B delivers four sacks to C, which C does not pay for. The guarantee given by A was not a continuing guarantee, and accordingly he is not liable for the four sacks." Illustration (c) clearly indicates that guarantee given by A was payment of five sacks of flour only. The said guarantee did not contain payment of any future price and subsequent transaction was rightly held not liable. The said illustration does not help the petitioners in any manner. Section 133 of the Contract Act, 1872 deals with discharge of surety by variance in terms of contract. The petitioners have referred to Illustration (b) of Section 133. Present is not a case where surety can be said to be discharged by varian ..... X X X X Extracts X X X X X X X X Extracts X X X X
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