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TMI Blog2015 (1) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... -06 to 2009-10 - Thus, notice in Form E-30 itself shows that minimum thirty days’ time as provided under sub-section (2) of Section 9C of OET Act has not been granted to the petitioner - Thus, it is a case of clear violation/infraction of the mandatory provisions of Section 9C of the OET Act and proceedings initiated by the AO in pursuance of such invalid notice would be illegal and void. Scope of the powers of AO - Whether the AO who is the creature of the OET Act can act contrary to or de hors the provisions of the Act – Held that:- The Assessing Authority who has issued the notice for assessment of tax as a result of audit in Form E-30 is the creature of the OET Act - he cannot in any manner act contrary to or de hors the provisions of the OET Act - Since sub-section (2) of Section 9C of the OET Act mandates that the dealer shall be allowed time for a period of not less than thirty days for production of relevant books of account and documents, the assessing officer being the creature of the statute cannot allow time less than thirty days - On this score, the notice issued under Annexure-2 for assessment of tax as a result of audit is invalid – the same has been held in COMMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prejudice is caused to the petitioner for not allowing him a minimum period of 30 days time as prescribed under Section 9C(2) of the OET Act. Therefore, the notice not providing 30 days time is not invalid. Further, notice for assessment of tax issued in Form E-30 as a result of audit, does not require to allow 30 days time to the dealer to produce books of account. Hence, liberty has been given to the Assessing Officer to grant time less than 30 days in the notice. It is further submitted that the provision of Section 9C(2) of the OET Act is not mandatory, it is directory in nature. 4. Placing reliance upon the judgment of this Court in the case of Chintamani Industries vs. Commissioner of Sales Tax, Orissa and others, [2009] 25 VST 220 (Orissa), Mr. Kar submitted that unless it is established that violation of a directory provision has resulted in loss and/or prejudice to the party, no interference is warranted. Even in the case of violation of a mandatory provision, interference does not follow as a matter of course. Further, placing reliance upon the judgment of the Hon ble Supreme Court in the case of Commissioner of Customs, Mumbai vs. Virgo Steels, Bombay and anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the dealer may have been assessed under Section 9 or Section 9A, serve on such dealer a notice in the form and manner prescribed along with a copy of the Audit Visit Report, requiring him to appear in person or through his authorized representative on a date and place specified therein and produce or cause to be produced such books of account and documents relying on which he intends to rebut the findings and estimated loss of revenue in respect of any tax period or periods as determined on such audit and incorporated in the Audit Visit Report. (2) Where a notice is issued to a dealer under subsection (1), he shall be allowed time for a period of not less than thirty days for production of relevant books of account and documents. (Underlined for emphasis) 8. As per sub-section (1) of Section 9C of the OET Act, where the tax audit conducted under Section 9B results in the detection of suppression of purchases or sales, or both, erroneous claims of deductions, evasion of tax or contravention of any provisions of this Act affecting the tax liability of the dealer, the assessing authority serves on such dealer a notice in the form and manner prescribed along with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued for assessment is invalid, the assessment would be bad in law. Therefore, the notice for assessment of tax without allowing the minimum period of 30 days for production of the books of account and documents is invalid in law and consequentially, the order of assessment and demand notice passed/issued are not sustainable in law. 11. Our above view is fortified by the following judicial pronouncements: 12. The Hon ble Supreme Court in the case of Y. Narayana Chetty -vs- Income-tax Officer, (1959) 35 ITR 388 (SC) at 392, held as under: The notice prescribed by section 34 cannot be regarded as a mere procedural requirement, it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid, then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts in Commissioner of Income-tax v- Ramsukh Motilal (1955) 27 I.T.R. 54) and R.K. Das Co. v- Commissioner of Income-tax, (( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment of tax as a result of audit in Form E-30 dated 19.06.2009 was issued requiring the petitioner to appear in person or through his authorized agent before the Assessing Officer on 06.09.2009 at 11 A.M. to produce or cause to be produced books of account for the period 2005-06 to 2009-10. Thus, notice in Form E-30 itself shows that minimum thirty days time as provided under sub-section (2) of Section 9C of OET Act has not been granted to the petitioner. Thus, it is a case of clear violation/infraction of the mandatory provisions of Section 9C of the OET Act and proceedings initiated by the Assessing Officer in pursuance of such invalid notice would be illegal and void. 18. The contention of Mr. Kar, learned Standing Counsel for opposite party-Revenue is that the petitioner has not objected to the notice issued for production of the books of account and documents allowing less than 30 days time and therefore, the assessment order passed in pursuance of such notice is not invalid. We are afraid how there can be a waiver of the condition precedent, compliance of which alone can confer jurisdiction upon an Assessing Authority for making assessment. The order of assessment havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions in violation of the statutory Rules and Regulations. A similar view had been reiterated by the Apex Court in Ambika Quarry Works etc. v- State of Gujarat and others, (1987) 1 SCR 562; Purushottam v- Chairman, Maharashtra State Electricity Board and another, (1999) 6 SCC 49 and Sultan Sadik v- Sanjay Raj Subba and others, AIR 2004 SC 1377. 9. Therefore, it is evident that when the action of the instrumentalities of the State is not as per the Rules and Regulations and supported by the statute, the Court must exercise its jurisdiction to declare such an act illegal and invalid. It becomes the duty of the Court to ensure compliance of such Rules and Regulations for the reason that they are binding on the authorities. Any order or action done by the authority in violation of the statutory provisions is constitutionally illegal and this cannot claim any sanctity in law. There can be no obligation on the part of the Court to sanctify such illegal act. 22. The various decisions relied upon by Mr.Kar, learned Standing Counsel are of no assistance to the opposite party-Sales Tax Department for the reasons stated hereinabove. Moreover, the facts of those cases are complete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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